5 Things You Should Know About Renting Your Home
For Rent by Owner: What Every Homeowner Should Know
If you are considering renting out your property as a for rent by owner, read this article for everything you should know about renting your home.
Congratulations! You’re the proud new owner of a rental property. Whether you’ve decided to move and keep your previous home, or you bought an investment property, having a new rental can seem overwhelming. When done the right way, owning a rental property is a great way to build equity. And don’t worry, you’re in good company. More and more people are becoming interested in renting.
In fact, both millennials and retirees are finding renting to be more appealing than buying a home. Millennials aren’t quite ready to lay down their roots, while retirees don’t want to risk investing in the housing market just to have it fall again.
If you are considering renting out your property as a for rent by owner, read this article for some key facts you should know about renting your home.
For Rent by Owner Critical Facts
Having a rental property might be great for your income stream, but there are many factors to consider. As a landlord, you are the one who is responsible for timely response to emergencies or broken appliances. You need to be versed on legal aspects of owning a rental.
You may have heard from other single family home landlords. Some may tell you it’s been the best investment they’ve made and others may tell you it’s a nightmare.
If this is your first time trying to place your property for rent by owner, these tips will help you get your property up and running.
1. Decide What Type of Rental
Did you know there is more than one way to rent your house? There is the traditional way, where you get a tenant, sign a year-long lease, and collect rent each month. If that’s what you want to do, great! It makes a lot of sense if you don’t ever need to access your property.
There is another way to rent. Maybe you travel a lot and you just need to rent your house out while you’re out seeing the world. If so, then checking out vacation rental sites may make more sense for you. These days, there are several options. Each is geared to a different demographic, so you’ll want to do your research and see which option fits your requirements best. When you rent your home as a vacation rental, you’ll be able to use your home when needed and earn some extra income.
2. Make Sure You’re Properly Insured
This is a must! Not being properly insured will hurt you, your for rent by owner property, and your tenant. You need to get a rental insurance policy that is specific to your situation. It is best to go through a qualified agent to make sure you get the policy that will cover your property in any situation. Make sure you are insured before you allow any tenant to move in.
3. Have A Plan For Screening Tenants
The difference between a great landlord experience and a nightmare is choosing the right tenant. Choosing a tenant isn’t as simple as you might think. There are background checks, credit checks, rental verification and references, employment verification and many legal considerations. There are many tools online to help with this and nearly all charge for their service. You’ll want to factor in these costs as you consider your return on investment.
4. Understand Legal Requirements
The biggest nightmare for a new landlord is handling non payment of rent and an eviction. It’s important to be familiar with your legal responsibilities. There are specific landlord tenant laws for each state. Washington State landlord-tenant law is listed here.
5. Consider Property Management
For a reasonable fee, you can hire a management company to take care of your rental property. They will screen potential tenants, collect the rent, and be the contact for the tenant if anything needs to be fixed or taken care of. Essentially, they work as the middleman between you and your tenant.
This can be especially convenient if you don’t have the time or the desire to screen tenants, keep track of the rent that comes in, handle legal issues and house maintenance calls. Property management companies handle maintenance issues for many properties, so they have all the know-how and contacts for any issue that may come up.
Most property managers charge a fee based on a percentage of the rental price of your rental property. Some property managers, like VerraTerra in the Seattle area, charge a fixed fee. Fixed fee managers can save you a considerable amount of money and increase your cash flow.
Now that we’ve covered the basics, let’s get your property on the market and start earning some extra income. Have questions? Please contact us to speak to an experienced VerraTerra property manager in the Seattle area. We’re here for all your real estate needs.