Renting out a home can be a big commitment that many people aren’t ready for. If you’re considering renting out your house, there are many things to consider first. You need to be financially and mentally ready to become a first time landlord.
1. Does renting make sense for you financially?
When most people think of renting out properties, they instantly think of the profitability but sometimes this isn’t the case. To be worthwhile, financially, the rent must cover or exceed the mortgage payments in addition to any cleaning, maintenance, or other fees.
2. Does anything in your home need to be fixed?
Another important thing to think about before renting out your house is the condition of your home. It may be a good idea to have your home inspected before renting it out so you’re aware of anything that needs to be fixed before tenants move in. A home that’s in good condition is also more attractive to renters. They don’t want to worry about constantly needing to call their landlord to have things tended to.
3. Will you manage the property or hire a property manager?
You really need to ask yourself if you’re ready to handle the responsibility of becoming a property manager or if you need to hire one. Managing a property, even just one, can take up more time than you realize. Assess your available time right now and try to determine if you have enough spare time to commit to managing a property.
4. Do you know the insurance requirements and legal responsibilities?
Most people don’t realize that renting comes with many insurance requirements and legal obligations. If you’re unsure of all the legal responsibilities that come with renting out a house, this article outlines Indiana’s guidelines. If you’re in another state, search online to find your state’s specific guidelines.
5. How will you find and evaluate renters?
There are so many ways to find renters these days that it can become overwhelming. This article does a great job of outlining the best ways to find quality tenants. Just remember to follow the right laws and regulations for your state when reviewing applicants to rent your property.
6. How will you determine your rent price?
Deciding on a monthly rental price is very important in the rental process. There are many resources available to you to help you determine your rent price. We are here to help as well and answer any questions you have.
7. How will you get paid?
Your tenants will have to pay you in some way, so what do you prefer? Obviously, in this digital age, online payment platforms are so easy and convenient for people to use. But it may be good to have a few other options as well such as check, money order, or cash. You’ll need to be sure to record all transactions and have rules set in place for late or missing payments.
8. Will you write your rental agreement?
Having an ironclad rental agreement for your renters to sign is perhaps the most important thing you can do. A rental agreement protects you as the landlord by carefully outlining specific rules and expectations for your tenants. The clearer the agreement, the easier it is for them to understand and follow.
One of the best investments you can make in your rental journey is hiring a lawyer who specializes in rental agreements. If anything needs to be done correctly, the rental agreement is it.
Is renting out your house the right move for you?
Hopefully this gave you some valuable information and questions to think about and ask yourself before jumping into the rental business. Our phone number is 574-527-1700 and our email is Kim@homeswarsaw.com if you have any questions for us about listing your property for rent!