Renting out your property has many benefits. Perhaps your house has been on the market for a long time, and you’ve determined that it’s not worth enough to break even. If you inherited a property or received a gift property, you might not want to sell it. Some property owners want to become landlords to supplement their income. No matter your reason, you should start by getting your finances and physical house in order. Discover what steps you should take before finding a tenant below.
Invest in insurance
Your homeowner’s insurance policy won’t be enough if you rent out your home. It is your responsibility to ensure the safety of people on your property. Therefore, a landlord’s insurance policy is essential. This policy combines both property and liability coverage. In addition to the dwelling, any personal property and additions to the property are covered under property insurance. In the liability section of your policy, you are protected against losses incurred from medical bills and legal fees if you’re found liable for injuries sustained on your property by others.
Obtain necessary permits
For residential properties to be rented out, many municipalities require a permit. City hall is the best place to find out if you need a permit, as they vary by location. Safety is the purpose of the license. There is often an inspection from the local government to ensure that the house is safe, including the electrical system, heating, exits, and other health and safety concerns. In addition to providing you with a report, the inspector will discuss any changes, modifications, and repairs that are needed to ensure that the property is compliant. Permits aren’t expensive, but they’re required to convert your home into a rental property.
Do repairs and upgrades
To make the property more marketable and appealing to future renters, you may need to make repairs. Making sure it’s clean and freshly painted is the simplest and cheapest thing to do. All items that look dated should be replaced, provided the cost isn’t prohibitive. If you plan to upgrade your rental rates, make sure you factor in the cost of the upgrades.
Calculate your rental rate
Take the time to do some math before you list your rental. Create a list of all the costs associated with the house, including your mortgage payment (if you have one), taxes, utilities, and any repairs you’ve had to make. Next, estimate any maintenance, repairs, and other costs you will incur during the tenancy. Then calculate how much you would like to profit each month. Once you have determined a rental rate, check for comparable houses in the area. Compare your rental rate to other landlords in your area to get an idea of how competitive it is.
Know the laws
Understanding Fair Housing laws is essential before you start looking for tenants. They were developed to prevent discrimination based on gender and race against tenants. A landlord’s responsibilities and how you can advertise your property are detailed in these laws. When drafting your own package of paperwork, you may need the help of an experienced attorney.
Take care of your rental property the same way you would a regular business — follow the law, keep all your records, and prevent problems before they happen.
Consider a property management company
Consider hiring a property management company, like Sound Point Property Management, if your rental property is far from where you live, or if you don’t want the headaches of being a landlord. In addition to handling all the paperwork, a property manager manages repairs, collects rent, and communicates with tenants.
Sound Point Property Management can also help you with any legal procedures associated with eviction. The eviction process is a lengthy and expensive legal process. Although landlords can’t control their tenants’ behavior, it’s always better to avoid eviction because of the inconvenience and the costs, not to mention the risk of damage to the property.
Investing in a rental property can be an excellent way to supplement your income and grow your net worth. Sound Point Property Management is here to help you manage your property. Contact us today to start a conversation.
