I’m Thinking About Renting My House Out, What Should I Do To Prepare?
Thinking about renting your house out? We unveil everything your should do to prepare to rent out your humble abode.
After purchasing or inheriting your second home, you think you’re ready to turn one into an investment property. No other section of the housing market can compete with the current growth of single-family rentals. Although selling your home might be an easier choice, renting promises the best return on your investment.
But you’re new to this. Where do you start as a first-time landlord?
There’s more to preparing a rental home than making it look nice — though that’s certainly part of it. If you go in blind, you could face legal consequences resulting from landlord-tenant law or a shoddy lease.
Protect yourself and your investment with this renting house preparation guide.
1. Rental House Preparation
Just like selling a home, you need to make sure your rental property is in great condition before it’s ready to accommodate a tenant. In fact, a rental property needs to be in better condition than a house for sale. Many home-buyers are prepared to purchase a home with a few blemishes, knowing full well they’ll have to repair it.
But rental tenants aren’t going to do the work for you. The rental house needs to be in pristine condition if you want to attract worthwhile tenants at a worthwhile price.
Is everything in working order? Make sure all appliances are in good condition. While you can consider updating old appliances to charge more rent, don’t go overboard with expensive renovations.
Cleaning an entire home is a large commitment, but it’s a must to stay competitive. Vacuum, dust, and mop the complex yourself, or utilize a cleaning service. Consider a fresh coat of interior paint, replacing carpet or flooring that’s worn. Both will do a great deal to improve the visual appeal and get your home rented more quickly.
Once your home is in peak condition, pull out the camera and snap some pictures. You’ll be using these to advertise your home on whichever rental websites you choose. For the most rent and the best choice of tenants, aim to advertise your home during the busy summer months, when most people are looking for rental homes.
2. Property Management
There are two ways to manage your property: on your own or through a property manager. Property managers make renting easy — but it comes at a cost.
If you’ve cleaned the property done required maintenance and hired a property manager, then congratulations! Your work is done.
Property managers do more than make sure the rent is paid on time. They’ll advertise your investment property, find tenants, take care of most legal considerations, and keep your property maintained. To put it simply: Property managers do just about everything.
If you live far from your rental home, they’re basically a requirement rather than a luxury.
Most property managers charge 10% of the monthly rent and usually include a significant fee when a tenant first moves in. But less expensive options are available.
To make it easy for new landlords, our property management service is a flat monthly payment of $150 and a low, flat rate lease placement fee. This makes hiring a property manager more affordable and increases the profitability of your rental.
3. Rental Home Insurance
Once you decide to rent your house out, it’s time to change from homeowner’s insurance. This policy may provide scant protection, if any, and some states won’t allow you to have a homeowner’s insurance program as a landlord.
However, homeowner’s insurance is a good option if you leave personal belongings on the property, which otherwise wouldn’t be covered.
As a landlord, you want rental home insurance. Sometimes called fire insurance, the policy will cover a tenant’s medical bills if they are injured on your property. It will also pay for repairs for damages dealt to detached structures or caused by fire and serious weather.
4. Fair Rental Value
Prepare your home for rent by identifying its rental value. What are the rates of nearby rental properties? To get a good idea of what your property is worth, look for competitors who have homes in similar condition as your own.
But don’t forget about your own needs. You may have a different mortgage or insurance situation that requires higher fees. It’s tempting to charge exorbitant rates for rent, but remember that you’ll still be paying for the property while you wait for a willing tenant.
If you aren’t sure where to start, consider a free, no-obligation rental analysis.
5. Landlord-Tenant Law
Rental laws can get complicated. But as a landlord, it’s your responsibility to know the local housing laws. For example, the fair housing act could land you in legal hot water even if you’re acting in good faith.
And it’s not just your local area laws. Income from your rental property will come with its own tax laws and additional paperwork. Before you start receiving rent from a tenant, you should know how to organize and report the income to the IRS.
Most importantly, landlord-tenant law will shape the way you draft your lease. Rely on legal professionals to help you navigate the legal minefield of property management. Or instead, save yourself the headache by hiring a reputable property manager who can handle the legal paperwork for you.
Feeling Overwhelmed? Rely on Our Property Managers
Renting house regulations can throw new landlords for a loop. When you’re just starting out, renting a property may require more time and effort than you originally thought. But you shouldn’t throw in the towel.
If you have a home you’d like to rent out, a property manager will handle the entire process for you. Since 2009, VerraTerra has provided top-notch property management to landlords across the Seattle area.
Contact us and see how our flat rate property management service can save you both time and money.