Are you planning to move out but would still like to keep your current home? Instead of letting your home get stuck without any purpose, it’s best to rent it out. With that, you’ll be able to maintain the house, and you get to earn money on the side.
Usually, aside from being attached to the property, homeowners opt to rent their home because they think selling it might not be the best idea. For instance, if you think the property will still appreciate over time, don’t sell it. In the meantime, renting the place out will increase the value of the property even more because the maintenance is continuous.
But before you decide, you might want to consult a few real estate agents regarding your plan. Since they’re the experts, you can get more tips on when’s the right time to sell the place in the future.
Meanwhile, if you’re going to consider renting out your current home, here are some things you should consider first!
1. Know how to be a lessor
Entering a business is not something you can do overnight. Although being a lessor looks easy, there are many things you still need to know. First, you need to know the obligations of a lessor, like the maintenance of the house, sending monthly bills, and handling issues.
Next, learn how to inform or confront the tenants if you have issues or concerns. Even if you’re about to evict them, there’s no need to shout and get angry. When you have to evict tenants, you need a lawyer or a local law enforcer to help you. Even if you have the right to the property, it’s not allowed to drag the tenants outside the house so that they can leave.
2. Terms of the agreement
As mentioned, consulting real estate agents will help you come up with the right amount of rent. However, you can also check online and the market before deciding.
In addition, you need to set some terms that you and your tenants should follow. What’s the due date of the bills? Are there penalties for late payments? Make sure that your lawyer cheques it before signing. The terms of the agreements should include every single detail that binds you and the tenants together.
Aside from the terms you’ve set, try to attach a copy of the renting laws in your area just in case they’re not locals.
3. The status of the house
How’s the house? Does it have signs of daily wear and tear? Does it need some renovations? Ask yourself. If you’re going to rent a plant, would you rent the place? If you can’t decide and think you’re being biased, you can go straight to real estate agents. If they approve, you can start renting the place out right away.
On the other hand, if there are issues on the property, you need to address them first. But if you want to increase the rate of the rent, even if the house is good to go, you can still plan to renovate.
4. Marketing and managing the house
Is your house ready to be seen? Introducing your house for rent in the market can be hard. That’s why it’s recommended to hire a real estate agent. Since they know how the market works, and have an idea about the rate of people looking for home rental in your area, you can find prospective tenants right away.
But aside from real estate agents, you also need to hire a property manager. Since you’re going to move to another home, you might be busy settling into another environment. So while you’re doing that, there should be someone who takes care of the house and makes sure everything’s in order.
5. Setting insurance and other essentials
Is your property insurance up to date? You should check and see if you need to renew or not. However, if the owner’s insurance is different from the rental insurance, you should also get one. Look at the local policies on being a lessor, and see if you need to accomplish other permits.
Of course, since you’re going to establish a business, a business permit is also important. In addition, since it’s a business, you need to create a marketing plan and set a goal. For instance, if your goal is to maintain the house occupied for two years, it’s best to indicate it in your plan.
6. Finding good tenants
Above all, the most important thing to consider is how to find good tenants. They’re good in the sense that they have a great record from their past rentals. Aside from the tenants that your real estate agent can find, you can ask your family and friends for recommendations.
If there are other documents you wish to see, let them know in advance. Moreover, you can create a form that includes all their basic information, just to see if they’re being honest.
Are you excited to venture into a new business? Let us know how it feels to become a lessor for the first time by leaving a comment below!
ABOUT THE AUTHOR:
Aliana Baraquio is a web content writer working for Bennett Property, a family-owned company that offers the full range of property services including Sales, Leasing, and Development in Sydney’s Northwest. As a writer, she is passionate about providing good quality articles that will help readers in making the right choice.
