Are you moving? Putting your home on the market isn’t your only option! In some circumstances — like when the market is particularly slow or you have to move quickly — it may be a good idea to turn your home into a rental property instead.
This is a great alternative to selling if you’re feeling unsure about the COVID-19 real estate market. Plus, it’s a good way to supplement your income and get your feet wet in the wonderful world of real estate investing.
Here’s a quick guide from Harford County Living to help you prepare your property for tenants.
Are You Prepared to Be a Landlord?
Being a landlord is a demanding job. You will have to be on call and ready to respond to issues at all times. You will have to deal with tenants who don’t take care of your property. And you will have to handle unexpected maintenance problems that require expensive remedies.
If you don’t have the time or mental bandwidth to take on these additional responsibilities, Redfin recommends hiring a property management company to help you out. A great property manager will handle everything from finding reliable tenants to collecting rent and organizing maintenance.
Make a Few Upgrades
Once you decide that landlording is up your alley, you can start preparing your home for tenants. You may decide to make a few upgrades around the property to make your home more attractive to the types of tenants you want to attract. For example, if your ideal tenants are millennials, consider investing in kitchen upgrades and smart home technology.
You’ll also want to make improvements that bring your home up to speed with other rentals in the area. Do some research into local listings and see what features other rentals have to offer, whether it’s an en suite washer and dryer or a fenced backyard.
Update Your Home Insurance
Before you rent out your home, make sure you update your home insurance. Your existing policy will not cover your rental business. Landlord insurance, however, will protect you from personal liability if someone gets hurt on your property and can save you a lot of money if your rental is the target of theft or vandalism. Call around for quotes to find a landlord insurance policy that aligns with your budget and coverage needs.
Determine Your Rental Rates
Setting your rental price may be the hardest part of the whole process. Charge too little, and you’ll lose potential income. Charge too much, on the other hand, and you’ll face frequent vacancies. The Balance recommends looking at comparable properties to determine the best rates for your rental. Focus your research on properties in the same area as yours. You’ll also want to look at homes with a similar number of bedrooms and bathrooms.
Once you know what others are charging for rent, adjust your rates according to the desirability of your home. In-demand features like a great view, modern updates, or large square footage will help you justify higher rates.
Find Great Tenants
Bad tenants will make your rental experience a constant headache. Good tenants, on the other hand, will make your life an effortless dream. They’ll pay rent on time, follow the terms in your lease agreement, and take care of your home as if it were their own.
But how can you find those elusive tenants that are respectful of your time and property? HGTV suggests using a rental application form, performing background checks, and having everyone sign a lease. In your lease, include who is responsible for maintenance, where parking is permitted, and any other agreements that are important to you, like pet policies or waste disposal requirements.
If you’re moving to a new home and you’re feeling uncertain about selling during a pandemic, renting your home to tenants could be a great alternative. Take your time to get everything in order before you try to fill that vacancy. When done right, managing a rental property is an incredible learning experience!