There are a plethora of reasons why someone may want to consider turning their home, which is their primary residence, into a rental property. Perhaps you are looking to make passive income or your home has been sitting on the market for longer than you anticipated. Regardless of what your reasoning may be, we have provided you with several tips that could help you have your home start making you money.
Before taking the plunge, there are a few steps you will want to take to make sure both you and your tenant are covered. Take a look at these tips to help get you started on becoming a landlord in your own home.
Talk to a Property Management Company
Working with a property management company can help you identify the areas you need to address when considering all aspects of your rental unit or property. This can include anything from tenant screening to handling regular maintenance requests.
The truth is, there are many aspects of becoming a landlord you may not be considering. It’s important and crucial to talk to a professional team of experts especially when you are inviting strangers into your personal residence to live for an extended period of time, contract or not. Don’t cut corners or try to do it on your own. A property management company is absolutely the smartest and safest way to go.
You Have To Look Into Additional Insurance
Simply having your regular homeowners insurance will not be enough if you are planning to rent out one of your units or another space within your home. Anytime there is a part of your property you intend on renting, you will need to look into having landlord insurance.
This type of insurance combines both your property and liability insurance to cover you in case a situation arises such as a tree falling onto the property where your tenant lives or if there is a gas leak that leads to a potential medical crisis for your tenant. This is why understanding the laws that are required for both yourself and your tenant is crucial if you plan on renting your home, regardless if it is for a vacation rental, a short-term rental, or even a long-term rental.
Don’t Forget About Your Permits
Depending on where you live, your property will require certain permits in order to be able to rent it to an outside tenant. These requirements will vary based on your city or town so it is important to check with your city hall to see what permits you may need.
You might be thinking permits are a waste of time and are just the city trying to control how you make money. But the truth is that it is important to have certain permits because they center around the safety of the tenants. Usually, a local inspector will come to the house to do a proper inspection.
You can also hire a property management company to be able to assist with such inspections. They will look over the house or unit for any safety hazards that may need repair or renovation prior to being able to rent the property. If your home is compliant, then you will be free to rent your property as you intended. Inspections can sometimes be expensive, again which is why you might want to hire a property management company to assist.
Prepare For Repairs and Renovations
Prior to renting your house, you will want to do a thorough analysis of your home for any repairs and renovations you may want to consider making. The more renovations that are done to your home, the higher rent you can ultimately charge. A house or unit that has stainless steel appliances or provides a washer and dryer can charge a higher rent than one that does not.
Other repairs might need to be made as well prior to posting a listing for your rental property on various rental sites. This could include anything from hinges on doors to broken light fixtures you have been postponing.
You will have a much easier time finding someone to become a proper tenant if these repairs are addressed ahead of time. Think about it. No one is going to want to move into a new place when there are dozens of issues that already need to be addressed upon their move-in.
Figure Out What You Will Charge
This is where you will want to start doing a bit of research, not that you haven’t already started with the amount of work it truly takes to become a landlord. In order to make a profit, you have to figure out what a reasonable rent price is in your area for the type of unit or home you are renting.
For instance, you won’t want to post a listing for your home at $2,000 per month plus utilities if the same type of unit within the area goes for only about $1,200. There would have to be some substantial upgrades made to the unit along with additional features for it to be well worth the cost for a potential tenant.
Be realistic with your pricing. Start looking at other listings within the area. See how long the listings have been posted for and what the median price range is for. Do a bit of research into the rental market. See what your competition is looking like or what the demographics are for your region and for recent renters in the area.
When it comes to redefining your home and reevaluating your financial situation, there are certainly a lot of stressors that come to mind. It is no wonder why you may want to consider turning your home into a rental property. But no matter your reason for making this decision, it is an incredibly feasible means to make extra income.
Before you decide to take the plunge yourself, talk to Green Residential, your local property management company in San Antonio. We can help assist with various tasks such as tenant screenings, maintenance requests, market analysis, and so much more. Let us help make the process of turning your home into a rental property alleviate the added stresses of uncertainty. We’re here to help!