Renting out property could be a very profitable venture. If you go about it correctly you can use the revenue you earn from leasing your house to cover the mortgage payments, which frees up extra money to invest in more possessions while procuring a steady stream of monthly earnings. It’s worth noting that every state sets its landlord/tenancy legislation, which define your responsibilities as a landlord. Before you do anything else, you should review the regional laws to see what restrictions your condition may impose. Look online or consult an attorney in your area for more aid.
Assess the quality and condition of your house. Before you can rent the house it must satisfy all applicable state and local building codes. If you’re not certain if your house is currently up to code, retain a construction inspector to evaluate the house for you.
Complete any repairs that your house might need, particularly in the event that you determine that your house doesn’t meet local building codes. Always use a certified specialist to finish any work to the electrical and domestic systems of your house. Consider upgrading outdated appliances to increase the rental price of your property.
Calculate the yearly costs for keeping up the house, such as mortgage payments, insurance, real estate taxes, utilities, repairs and wear-and-tear expenses. Divide this amount by 12 to determine the minimum monthly lease you have to charge to break even on leasing the house. If you would like to make a profit from leasing the house, add the amount you hope to earn on top of those expenses.
Compare the amount you’ve come up with into the moving rent for comparable properties in your area to determine whether the amount is fair, or if you have to adjust it up or down. Utilize an online apartment locating service, such as ApartmentFinder or even Rent.com, or check the regional newspaper classifieds for accessible apartments.
Market your leasing property to draw applicants. Try placing an ad in the regional paper, posting fliers in local stores and publishing a listing online. Provide clear, comprehensive information regarding the house, for example, amount of rooms, bedrooms and bathrooms, the conveniences, the location, the monthly lease and what utilities, if any, the lease includes. If you plan to charge a security deposit, include this as well. Offer your email address and phone number so interested parties can reach you with any questions they might have.
Produce a very simple application, then screen potential tenants by inviting them to finish one. The application should consist of spaces for each applicant’s full name, date of birth, Social Security number, current address and telephone number. Also include segments for earnings, employment information and references. If you plan to run credit checks in your applicants, clearly state this on the application and obtain each applicant’s permission. Contain a place for the applicant’s signature at the bottom.
Choose the most promising applicant and extend her the home. If she takes, talk about the lease agreement and the move-in date. If she falls, either move to the next most promising applicant or re-list your premises. Don’t forget as soon as you find a suitable tenant, to remove your listings!
Publish a lease that defines the agreement between you and your new tenant. Include basic data, such as the address for the house, the monthly lease, the amount of the security deposit, the move-in date and the ending date of the lease. In case you have any particular rules or requirements, list each one in a new paragraph in the lease. Consider retaining an lawyer to draft a lease for one to make certain you protect your interests and adhere to applicable tenancy laws.
Collect a security deposit (if appropriate ) and have you and the tenant sign the bottom of the lease. Provide the tenant with a receipt for the deposit along with a copy of the signed lease for his or her records. Give the tenant a copy of the key to the house–be sure you keep the original on your own!