Renting your property may seem like an easy way to increase your passive income, but starting the process, you may find it more complicated than expected. Your home can stay on the market for months without a rental applicant because it is priced above fair market rent. A bad tenant can be late or outright refuse to pay the rent; They have the potential to cause thousands of dollars in property damage and may ignore your attempts to evict you from the property until the authorities are involved.
So how can you avoid the headache of these common difficulties associated with renting a property? Here are five things to do before renting your home to reduce the risk and stress of being a new owner.
1. Take pictures of the property
Property photographs are necessary for a number of reasons. They are an important part of online advertising; Otherwise, prospective tenants overlook favorable rental listings without property pictures because they don’t want to have to wait for a home tour to find that the property doesn’t have a layout or layout to suit them. These photographs will also come in handy when your future tenants move in, as you can use them to measure any property damage that has occurred during the rental period.
2. Assess the fair market rent
While it may be tempting to charge a higher rent to recoup money from recent renovations you have done or moving costs since you left the property, the best thing to do is do some market research – check with rental websites , newspapers, local landlords, real estate agents, and property management companies to determine the amount for which properties of similar location, size, and condition are rented.
3. Create a concise and efficient rental request
An effective rental application will not intimidate potential tenants with its extension, but it will be comprehensive enough that it can be used for tenant screening purposes. Any additional information you need from the tenant should the assessment pass can be included in the lease documents. A good application will have spaces for the following items:
- Date of birth
- Social Security number
- Phone number
- Current / previous addresses (last 7 years, including owner’s name and contact information)
- Current employer (name, address, date of hire, income, contact information)
- Authorization to obtain the statement of the consumer report
- Holding Signature
4. Consider using a property manager
Property managers will generally charge a percentage of the monthly rent for their services, but in return, they will take care of things like finding new tenants, creating / signing leases, collecting rent, and issuing legal notices (including evictions). Hiring a property manager reduces the profits you will make from your tenants’ rental payments, so you should carefully consider the cost benefit of these services.
5. Find good tenants
Finding a decent tenant is easier said than done – many applicants may be nice, polite, and will seem like a good fit, but they will create a flood of trouble for you. The best way to improve the quality of the tenants you rent to is to conduct tenant background checks – that is, choose tenants based on measurable rent and tax liability. Most landlords will charge rental applicants an application fee to cover the cost of the tenant screening.