Interest rates in the housing market are lower than they have been since the 1960s. Interestingly enough, more people are still choosing to rent rather than own.
In 2010, 33.1% of Americans were renting rather than owning and analysts say that this percentage will probably continue to rise.
This expanding rental market has presented a great opportunity to homeowners who are unable to sell their homes. If you’re considering renting out your house, there are some important things you should know before taking the fatal plunge.
What Does It Take?
Being a landlord is not a walk in the park. Even with model tenants, there are many responsibilities that will fall on your shoulders. The more planning you do, the more prepared you’ll be for whatever comes your way.
The first thing you need to do is draw up a lease. Unless you’re a law professional, you’ll need the help of an attorney to do this correctly. The lease spells out your rights as a landlord and the rights of your tenants. A good lease should include rental due date, late penalties, pet policies, rules of behavior, repairs, eviction terms, etc…
Each state has different landlord-tenant laws. Before renting out your house, read up on the laws in your state. They will influence certain terms of your lease; for example, security deposits. Make sure that what you write in your lease is in accordance with state laws.
How much to charge? That is the question. Since potential tenants will be shopping around for the best prices, you’ll need to set a competitive price. Find out what other landlords in your area are charging and then set a price that will attract tenants; but that also makes renting worth your while.
Protect your property with rental home insurance. This is a policy that you’ll need to add to your existing homeowner’s policy. It covers legal costs, medical expenses, loss of rental income, and repairs. You should also encourage your tenants to buy renters insurance.
Getting the Word Out
Hiring a real estate agent can make finding tenants a lot easier, but the service can be pricey. Many landlords choose to minimize expenses by getting the word out on their own. Local newspapers are one good option, but you can reach a bigger pool of candidates through the internet.
RentalAds.com is a rental property website with thousands of rental choices and it attracts thousands of potential tenants. Renting out your house on the site is easy and free.
Choosing a Tenant
You’ve drawn up the lease, taken out an insurance policy, and listed your home. Now you get to choose the tenants. Make your choice very, very carefully!
You need to find a dependable person who will pay rent on time and who will keep the home in good condition. If you are going to share the home with the tenants, make sure they are people that you will feel comfortable living with.
One way to find good tenants is to ask for references, check criminal history, and look up their credit histories.
Renting out your house has many potential risks. However, if you take care to understand all your responsibilities, prepare thoroughly with professional help, and choose a good tenant; you can turn it into a good, profitable experience for you and your tenant.