Tips for surviving renting your home.
Are you looking to upgrade into a larger home and rent out your current home? Make sure to check out these helpful tips to renting your home and protect your property.
Find a Good Tenant – You can find tenants by advertising in local newspapers, both in print and online. Also spread the word through friends, relatives and coworkers you are renting your home.
Ask potential tenants to fill out an application form, listing their basic information: name, employer, salary, previous landlords and references. You’ll also need their Social Security number and signed authorization to check credit reports and criminal history. If you hire an online agency to provide background checks, make sure it is accredited by the Better Business Bureau.
Do your own background checks by when renting by:
- Pulling credit reports. You can conduct your own research through one of the credit reporting agencies — Equifax, Experian or TransUnion — as long as you follow the guidelines of the Fair Credit Reporting Act, or FCRA.
- Checking criminal history. Search state and local records online or find an agency. Landlord.com offers tips on conducting tenant screening.
- Checking references, contacting employers and talking to previous landlords.
Determine How Much Rent to Charge – Get an idea of rent amounts by checking newspapers, online resources or neighborhood rental signs. Be realistic about rent levels. The rent may be lower than your mortgage payment, but if you want to find a tenant, the rent must be comparable to what’s in the market.
Protect Your Rights with a Lease – Make sure to have a written lease so both parties understand their rights and obligations when renting. A good lease complies with fair housing, rental, tenant and insurance laws of your region.
A lease should spell out the following:
- Lease term: A month-to-month lease offers more flexibility if you are selling, while an annual lease provides more stability if you are holding on to the property.
- Security deposit, usually one month’s rent or more
- Rental due date and late penalties
- Repairs and who’s responsible for what
- Routine upkeep and maintenance responsibilities, such as lawn care
- List of tenants
- Rules of behavior, including noise levels, neighborly conduct and smoking
- Pet policies and related deposits
- Who pays homeowner association dues
- Association rules that the tenant must follow
- Arrangements for showings, if you plan to put your home on the market while it’s being rented
- Eviction terms, such as not paying the rent or damaging the property
Protect Your Property with Insurance – Protecting your property with the correct insurance policy is extremely important. You need a different policy if you’re renting a property to a tenant versus using it as your primary residence. As a landlord, you’ll need rental property insurance. This policy covers your home’s structure, legal costs, medical expenses and loss of rental income, if repairs are needed. Since you are not responsible for the tenant’s belongings, you should encourage tenants to buy renters insurance.
Hire a Management Company – Fees are charged primarily for two services: finding a tenant, which includes advertising and background checks, and managing the property. The fee for filling a house when renting can range from 50% to 150% of one month’s rent, depending on the area. Monthly management includes collecting the rent, charging late fees, handling repairs and dealing with early vacancies and evictions. One big advantage of using property managers is emotional distance.
Prepare Properly for Evictions – You’ll need an attorney to evict a tenant. If the renting tenant doesn’t leave willingly, you can’t just go and move their personal property and kick them out. How much is an eviction? Legal fees alone can range from $300 to $1,000.
Bottom line make sure to research everything to make sure your rental process goes as smoothly as possible. Nothing can be more stressful than a bad renter.