Thinking of selling your home, but in today’s real estate market, you will probably be happy if you break even? Why not rent your home until the market turns around? Becoming a landlord is not that difficult, and offers many advantages to selling your home. Before you decide to turn your home into a rental property, you need to answer these basic questions:
1. Is it financial feasible for you to rent your home? You need to calculate the total cost of keeping your home, including mortgage payments, maintenance, utilities, and any professional services you would need. Can you afford these costs if your property is vacant?
2. Can you be a good landlord? This will require you respond quickly to any problems or concerns your tenants might have. Can you evict your tenants for non payment? If your not sure if you can do this, you can still rent your home, but you should consider using a property management company. They will handle all the headaches of renting your property, but this will add additional costs.
If you answered “yes” to these questions, take the following steps:
1. Decide on your monthly rental charge. You need to check websites, like www.findhomerentals.net, craigslist.org, and realtor.com for the rental price ranges in your neighborhood.
2. Take your monthly costs for the property, and compare the rent you are thinking about getting. Sometimes, even if you can’t make a profit at first with your rental, it is still better than selling the property.
3. If you are not going to use a property management company, you need to screen your perspective tenants thoroughly. Consult credit reports, employment status, and previous references from other landlord or property management companies. If you are going to use a screener, be aware that some of the data on perspective renters can be inaccurate, and you are liable under fair housing laws. If you do your homework up front, you will save yourself headache down the road.
4. Decide how much your security deposit is going to be, and when you receive a deposit, it has to be kept in an escrow account.
5. Decide how you are going to handle maintenance of the property. Can you provide quick service to your renters for repairs and issues. Can you provide normal upkeep and maintenance for your property. If you might have a problem doing any of these things, you should consider getting a property management company.
With the proper planning and due diligence, you can make being a landlord, a profitable and rewarding pursuit.