If you’ve entertained thoughts about renting out your home, there may be a few questions you’ve already asked yourself, such as, “Is it worth hanging on to this property? How will I feel about strangers moving into my home? Will my tenants be responsible?”
Owning a rental property can require hard work, patience, and planning. On one hand, there’s the good to consider, like the potential to increase your income and build a steady cash flow. On the other hand, being a landlord may test your ability to deal with the unexpected, like emergency home repairs or unreliable renters.
Before you hand over the keys to your home, here’s what you can do to make the rental process go smoother.
- Research your market. Research the market in the neighborhood of your rental home to choose a rent amount that matches the local rental rates while still helping you earn a profit. Consider the number of bedrooms, bathrooms and square footage. You might also take into consideration any new additions to the property and the age of the home. Don’t forget to factor in costs like pest control, lawn maintenance, and occasional home repairs.
- Grace your home with curb appeal. Depending on where you live and the time of year, your home may have taken a beating from the sun, wind, rain, or snow.Without costing an arm and a leg, a power washer can work wonders on your home to give it a fresh look. Clean out the flower beds and trim shrubs and low-hanging tree branches. Giving your lawn a fresh trim, your panels a new coat of paint, or your shutters a good cleaning are all good components of curb appeal. The first impression of your home’s curb appeal can mean everything.
- Check to see if your prospective tenant is financially responsible. A credit check can offer insights into your applicant’s payment history and gives you a good idea if they’ll likely be a good or bad credit risk. You may also want to consider hiring a reputable company that can perform a tenant screening check on your potential occupants to find out if they’ve damaged previous rental properties or have a criminal record. You can also ask for referrals of past residences since this information won’t be included in a credit report.
- Plan for financial emergencies. Renting comes with its own set of unexpected emergencies. These emergencies can range from tenants suddenly vacating a property to calling you on a Sunday about a potential water heater replacement. These can be tough expenses to bear, and as a landlord, it will behoove you to keep aside funds for such situations.
- Get appropriate insurance coverage. When renting your home to someone, there’s always the possibility that they, or one of their guests, might have an accident or damage your property. You could also experience a loss of rental income due to an unforeseen disaster. The proper insurance may cover these things along with legal fees if you end up taking your tenant to court.
For some, becoming a landlord is all about on-the-job training. It can be a challenge, but in the end renting out your extra space can help you reap financial benefits.
By: Becky Frost
Becky Frost is Senior Manager of Consumer Education for Experian Consumer Services, which offers credit monitoring products ProtectMyID®. Find Becky on Google Plus. Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Trulia.com. This article is provided for general guidance and information. It is not intended as, nor should it be construed to be, legal, financial or other professional advice. Please consult with your attorney or financial advisor to discuss any legal or financial issues involved with credit decisions. Published by permission from ConsumerInfo.com, Inc., an Experian company. © 2014 ConsumerInfo.com, Inc. All rights reserved.