(LoanSafe.org) – Despite a rise in home sales, homeowners are still afraid of listing their homes on the market. In some cases, many homeowners cannot afford to stay in their home either way. There is another way to keep yourself from going into default. If you can’t consider a “for sale sign” because you won’t get a fair deal for your investment, there’s always the possibility to consider putting up a sign “for rent.”
If you can’t afford to live in your current home, there may be someone out there who can. Or possibly you have to relocate due to a job transfer and cannot sale your home due to the value, in this case renting your home out may be the ONLY option to avoid a foreclosure or short sale.
Renting your home is always an option as long as it is feasible. However, you will now have the responsibility of being a landlord and the tasks that come along with it. Here are some tips and factors you will want to consider before finding a tenant.
How Much Will You Charge?
Rent should cover the mortgage payment and maintenance costs for the month and this amount is different for everyone depending on your specific property. An example may be for someone who bought their home at the peak of the great housing boom. If you have a loan that didn’t require you to put any money down, you’ve probably got a high interest rate than others. It is important that you are aware of surrounding rental prices as well because you will want to set a competitive price. Remember potential tenants are hungry and are often scouting the area immensely for the better deal.
This is an old and typical attraction for anyone looking to purchase/rent a property. Everyone knows that with real estate, it’s all about location, location, location! Is your property near a nice school district or a noisy town? Is it close to shopping centers or in the middle of nowhere? The location of your home will most definitely play as a factor in determining the price you can collect for rent, as well as revealing what kind of tenants you attract. The key here is “amenities,” the more you have – the more you’ll be able to charge for rent.
Landlords must fix everything! If there is a leak, a bedroom window that won’t open, or the air conditioner is broken, expect a phone call! Depending on how well your home was managed before, you might be getting a lot of these calls for repairs. Essentials such as water, electricity, and air conditioning must ALWAYS be up and running. If you can’t deal with the stress of keeping up with simple or major maintenance issues, there are companies who take care of this work for you. The cost is generally a percentage of the monthly rent. So you’ll want to make sure you can negotiate to have enough rent to pay for the mortgage, and for the maintenance company if you decide to ask for a little help.
Make a Lease
Lease’s protect the landlord just as much as they do the tenants. Laws will differ from state-to-state, and sometimes will even vary depending on the specific county. Avoid using blank lease forms from the internet as they may not include all the specific state and city laws.
A proper lease should include the lease term, the security deposit, the rental due date repair responsibility, routine upkeep and maintenance responsibilities, list of tenants, rules such as pet policies, homeowner association dues, association rules that must be followed, and eviction terms.
Find a Tenant
Sometimes tenants will come to you! If you’re in a bind however, locating a decent tenant can mean a lot of stressful hours and researching. You can hire online agencies to provide background checks for you. Just be sure to check if the agency is accredited by the Better Business Bureau.
When looking for tenants, you’ll want to be sure to get their salary, employer’s name, previous landlord’s name and number, and other references. In addition you’ll want to pull their credit report and criminal background. records
Prepare for Eviction
Find out as much about your local and state eviction laws as possible! Odds are you’ll need a lawyer when you evict someone, because you can’t just kick someone out on the streets with all of their stuff. Legally, it is typically a Sheriff who will handle the actual eviction. Evicting someone could cost $300- 1000 in legal fees, however, this could end up being at least a month or more of rent you are saving yourself by evicting someone.
These are all basic tips to consider when renting out your home. Don’t stop here. As stated, there are many laws when it comes to renting! This is why a lease is important and should include all the rules and regulations that must be followed.