If you decide to rent your home, the decision will not be an easy one, especially if you have no experience in it. You may think that renting out means placing an ad in the local newspaper or listing your home on a website. However, there is more to renting than this.
Here are some tips that will help you prepare when you decide to rent your home.
What It Means to Be a Landlord - As a landlord, you will be donning many hats simultaneously. You will be the property manager, leasing agent and the handyman. Your life will be busy handling many issues that may arise. You should know how to handle these issues patiently and gently. Some of the issues that you could be faced with include tenants not paying the rent on time, tenant moving out without informing you or tenants having a problem with the neighbors. Sit down and think of all the things that could go wrong and have a plan in place to tackle them. This will prove to be extremely beneficial when the need arises. Some of the things you should be planning for include the type of lease to make, how will you handle a problematic tenant, what are your legal options as a landlord and which professionals can you rely on if a situation with the tenant becomes serious.
Fluid Cash - It is important that you have enough money in your hands to keep your rental going. There will be weeks or months when you do not have tenants, you will have to spend money on regular repairs and maintenance, there could be emergency repairs or you may have to handle damage that is worth more than what your tenant has paid as security deposit. You should have sufficient money to handle these issues without getting stressed out. Furthermore, it is important to know that the rental price is dictated by the size, location and condition of the property. So, if the rent does not cover your mortgage, taxes and insurance, you will need money in hand to bridge the shortfall.
Landlord’s Insurance - Having a landlord’s insurance is important, as it will offer protection if your building gets damaged and prevent financial loss. Hence, switch your insurance from homeowner’s insurance to landlord’s insurance.
If you do not inform your insurance company that you are no longer living in the property, the insurance company has the rights to deny your claims. This will not happen if you have a landlord’s insurance. Additionally, some insurance providers will cover the losses if you are unable to rent your home due to damage, while others will cover for damage that a tenant causes deliberately.
If you do not want a landlord’s insurance, make sure that you at least make an effort to get liability insurance.
Prepping Up Your Home - If you want to get good tenants, you will need to work on your home before you start competing with rental companies and other homeowners. The best way to find out what you need to do is get a home inspection checklist. You can download one from the Internet. Now walk through the house with the list and check all the things that are listed on it. Jot down the condition of each item, including areas of your home that do not pass the inspection.
- You should first fix foundational or structural damage before you decide to fix other damage. This is because this damage can wreak havoc with your home and will cost you quite a bit if you ignore them now.
- Test the fixtures around the house to ensure that they are working properly. Make sure that none of the pipes and faucets is leaking anywhere, even in the garden. If they are, repair them. Replace fixtures that are leaking or damaged.
- Check the light switches and electrical outlets to ensure that they are working properly and there are no signs of damage, like burn marks on the surface.
- Clean your home thoroughly, right from top to bottom, including closets and cabinets. If required get a professional to wash the carpets. If the carpets are moldy, it may be best to replace them. Remove unwanted things from the house and discard them. If you have wood floors around the house, get them polished or refinished to make the floor gleam and shine. Do not forget the yard and garden. Mow the lawn and trim the hedges. Rake the dry leaves.
- If the walls inside the house look dull and dirty, paint them in neutral colors to make the interiors brighter and more appealing. Replace worn out or damaged door knobs and handles of doors, cabinets and closets.
- Open and close the windows and doors around the house to ensure that they are all working properly and can be closed safely. If the frames look damaged, it is time to repair them. This also will make your home more energy efficient.
Once you have finished all the repairs listed on your checklist, it is time to walk through the house one final time to ensure that you did not miss anything. If you are satisfied, it is time to begin looking for tenants.