A Beginner’s Guide to Rental Properties
You have so many reasons to consider renting out your property. From the added income to the security it provides in a rocky seller’s market, using a home as a rental property comes with numerous benefits. It also comes with a pretty steep learning curve. From struggling to find a well-qualified tenant to the difficulty of hammering out rental prices, maintaining an organized rental property can be challenging, to say the least. For those of you who are up to that challenge, here are some initial tips to making the most of your rental property.
Preparing Your Home
It seems that as time passes, tenants become pickier. This is especially true of down markets. If you’re in a competitive area with a lot of rental availability, it’s up to you to do your best to attract a lessee. To prepare for photos and tours, either conduct a deep cleaning or hire a company to handle it for you. This is also a great time to make sure all of the appliances are in working condition. If necessary, make the required repairs or upgrades.
A helpful tool during this stage is a simple checklist. Do a walkthrough of your home with a pen and paper in hand. Write down what you believe to be attractive selling points of your home and where areas can improve. Arrange these items in order of their priority level. That way, you’ll be able to address pressing concerns first without exhausting your budget.
Selecting a Tenant
If you’ve ever been a renter, you know all too well that a landlord can make or break your experience. The same will still apply now that the roles are reversed. A bad tenant can cause untold damages to your property, stiff you on rent, and provide a seemingly unending source of frustration. If you’re not doing your utmost to select a quality tenant, you’re going to be in for quite the hassle down the road.
To put it simply, tenant screening is an absolute must. If you’re using online rental applications, chances are they come with the added perks of background checks, rental history, and credit reports. While a credit threshold for rental is up to your discrimination, a prospective tenant’s background check and rental history will provide more than enough info to help you decide whether or not they’re the right fit for your property. For example, if you notice that a tenant has a tendency to move around frequently and you’re looking for a long-term rental, that person might not be the ideal match.
Rely on Professionals
While you can handle a fair amount of the rental process yourself, plenty of the legal and financial considerations that would benefit from the discerning eye of an attorney or accountant. If you’re ever unsure of the legality of any aspect of your rental or don’t quite know how to report the income from your property, it’s best to call in specialized help.
An attorney is especially helpful in parsing the terms of your lease and making sure you’re not violating any aspects of landlord-tenant rights. As for accountants, they are incredibly beneficial when it comes to tax time. The IRS stipulates that you must report the income your property makes but will also help you find out whether or not you qualify for any expense deductions.
Get Ready to Rent
As you can see, numerous aspects of the rental process don’t immediately seem clear. Whether it’s finding the ideal tenant to inhabit your home or retaining legal counsel to help you understand the finer details of local housing laws, it’s best to know the resources available to you before you get started. With a little research and a lot of patience, your property will be leased before you know it.