Renting out your home may sound like a really good move: you can increase your income and build a steady cash flow. But before you make that decision, think about these questions first: "Is it worth hanging on to this property?" "How will I feel about strangers moving into my home?" "Will my tenants be responsible?"
If that doesn't give you cold feet yet, throw in the amount of hard work, patience, and planning that becoming a landlord entails. Are you ready to deal with unreliable renters and the emergency home repairs?
Trulia has listed 5 tips to help you ease those worries before finally handing that key:
Research the market
Choose a rental rate that while makes profit, also matches local rates. You wouldn't want to overcharge and lose a deal from a similar nearby property that offers a much lower rate.
Just be realistic about it. Consider the number of bedrooms and bathrooms, recent renovations, as well as the age of the home. Don't forget to include costs for pests control, lawn maintenance, and occasional home repairs when deciding your rate.
The curb appeal
We've said it before and we'll say it again, first impression lasts. When potential renters come to check your place, the first thing they'll see is the outside.
A clean, well-maintained, and fresh-looking curb will immediately give that renter a good feeling about your property. Just trim that lawn, clean out the flowerbeds, trim shrubs and low-hanging tree branches, and give your panels a new coat, and you're good to go!
Tenant background check
The last thing you want is a headache of a tenant. To ensure that you don't let a criminal, or someone who doesn't plan on paying their monthly fees reside in your property, you should get a tenant screening test and a credit check.
A credit check reflects the tenant's payment history and from there, you can determine whether they'd be a good or bad credit risk.
Tenant screenings would reveal any record of the tenant damaging previous rental properties or their criminal record. It would also be wise to ask for referrals from their past residences since that is not reflected in a credit report.
Be ready for financial emergencies
When you are renting out a place, broken water heaters, falling ceiling, and just all those things that require money from your part are to be expected. If you get unlucky, you may also encounter renters that leave without leaving a note. As a landlord, it is your responsibility to set aside funds for such situations.
Get appropriate insurance coverage
While you don't wish it, you will have to expect for the worst as a landlord. You need to have an appropriate insurance coverage ready should tenants end up damaging your property, or when unforeseeable disasters happen, as well as legal fees should you need to bring issues with your tenant to the court.
