Trying to decide whether you should rent or sell your home? With housing markets still on the rise, many homeowners are deciding to use their property for rental income while waiting until the market is back at its peak to sell. If you’re a first time landlord, leasing your property can be stressful. The key to finding excellent tenants doesn’t lie in the luck of the draw. It’s all about how you prepare. That’s why Landmark Home Warranty has provided you with our 10 Step Guide for Renting Out your Home.
1. DETERMINE IF YOU SHOULD RENT YOUR HOME
Renting out your house can seem like a wonderful prospect to make money or help with your monthly mortgage payment. Don’t forget, though, being a landlord can be a difficult responsibility. You are in charge of collecting rent and repairing and maintaining your property’s appliances and systems. Before you begin renting our your home, make sure that you are prepared to shoulder the responsibility of becoming a landlord.
2. DETERMINE WHAT YOU SHOULD CHARGE FOR RENT
How much you should charge for rent can be a difficult decision. Luckily, by doing a little research on market value, you can find the perfect price point for your home. The market value of your home can be determined by looking at what other landlords in your area are charging for rent. You can do some quick searches on online, or you can call and ask for prices on similar homes in your area, posing as a possible tenant. Then, based on those prices or comps, you can find what you should be charging for rent.
3. PREPPING YOUR HOME FOR RENTING
For a more detailed account on what you can do to prepare your home for renting, you can find Landmark Home Warranty’s article on How to Prepare your Home for Renting here.
Many first-time landlords have no idea how to make their home desirable for renters. The best tip is to keep the home clean and inviting, and ensure it is in good condition. You can ensure major repairs and replacements are affordable, by protecting the home with a home warranty. A home warranty provides peace of mind for you as the landlord, as well as your tenants. Instead of having to pay hundreds, if not thousands of dollars on repairs and replacements of major home systems and appliances, you will only pay $60 for a flat-rate service call fee. That means HVAC, electrical and plumbing systems cost $60 to be repaired or replaced by trusted and bonded contractors for the home warranty company. For more information about home warranties, go to Landmark’s website at www.Landmarkhw.com.
4. PRESCREEN TENANTS
You can use online sites, newspaper advertising or put a sign on the front lawn to advertise for tenants. As possible tenants begin to call, give the tenant your criteria for renting your home. Some ideas for renting criteria include having a job, a good credit score or positive references from old landlords. Just remember to not discriminate.
5. CREATE APPLICATIONS
Next, create applications that interested tenants can fill out, so you can determine if they match your criteria. It is a good idea to ask your attorney to help with creating this document. Make sure that it includes:
- Full names of each of the renters
- Birth dates
- Social security numbers
- Current employer (with income and contact information)
- Past employers, (with contact information)
- Previous Addresses (and contact information for previous landlords)
If you want to run a background and credit check on your possible tenants, you should also include statement that lets the tenants agree to that, as well as asking for an application fee to cover the costs.
6. SHOW PROPERTY
Showing the property can be done a few different ways. You can have batch showings of the property to multiple interested tenants, to increase competition and not take up too much time in your day. Or, if you want to do more pre-screening of your tenants, you can schedule separate showings for each tenant. At the end of the property showing, give the tenants the application you created so they can apply.
7. REVIEW APPLICATIONS
As you receive the applications back from your potential tenants, first look for the criteria you gave them during the pre-screening. If they don’t meet those qualifications, call and confirm the information on the application is accurate, and then disqualify them. Then, check on their rental history, employment history and do credit and background checks. After you have found the qualified applicants, choose your new tenants on a first come first serve basis. Politely decline the rest with a quick phone call.
8. CREATE LEASE
You can find leases on the internet to print out, but it’s always better to sit down with your attorney and write out a loop-hole-free lease agreement.
9. SIGN THE LEASE
Meet the new tenants at the property and go through each portion of the lease with them. Ask for signatures as you explain. That way, the tenants won’t be able to say “Oh, I didn’t know that!” three months into the lease.
10. CONDUCT MOVE-IN REPORT
Before the tenants move in, walk through the home and take pictures or video of all of the rooms. That way, you know what the rooms are like before someone else moves inside. Then, make sure to have the tenants write a move-in condition report. Make sure they mark any and all problems in the house. In most states, a landlord can’t charge for damage charges if the move in report isn’t filled out when a tenant moves in.
Finally, hand over those keys, and let your new tenants move in!
If you’re interested in home warranties, and how they can increase the value on your property, go towww.LandmarkHW.com. There, you can learn about home warranty plans, read home warranty reviews, and see why Landmark is the best home warranty company.