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Rent Out Your Home

Tips For Renting Out Your Home Successfully


Most people today contemplate over the idea of renting out their houses in a down market. This is because they want the benefit of having an extra income to pay their bills or save money. People also decide to do this as a way to wait things out until the economy improves. The motives may seem plentiful, but there is a chance that this plan may become more problematic than it worth. This is especially when improper decisions are made. In this article, we are going to look at a few steps that will get you going in the right direction when renting out your home. 

Before you can hand over your keys to a complete stranger, there are a few decisions you have to make. As a matter of fact, the decisions that you will make now, even before you embark on the search for a good tenant will make the largest impact on the success of your rental. 

Here are some questions you need to ask before you rent out your house:
 
1. Why Rent Your Home?
 
You might be on the line trying to decide whether to rent your house out or not and whether it ís a good idea or not. In this regard, the first question to ask yourself should be, ìs should I rent my house out? If you are at the crossroads of selling or renting out your home, I would like to mention some of the reasons why renting out your home is the best decision. After all, the advantages of renting out a home are many:

•  Your primary home, which is a necessity, typically isn’t an investment or an asset. An asset is something that makes you money while a liability is something that costs you money regularly. By renting out your house, you will be turning a liability into an asset.

•  Renting out your house might also help in career investment with no extra costs, as you already own the home. This could be the first step in building your own assured wealth. As a matter of fact, most real estate investors start out this way (by renting out their houses as they upgrade to larger and better properties throughout their lives). Ideally, this can help in funding your retirement, as you might end up owning several properties by the time you are ready for retirement. 

•  Also, when you rent out your home, you will be able to continue holding onto your house as the tenants rent will pay down your mortgage every month. At this time, hopefully, property values will increase and build wealth for your future. Ideally, you may start to see an additional monthly cash flow if you can be able to rent you house out for more than you monthly expenses. 

•  Last but not least, by renting out your home, you still retain the possibility of returning to that house. This is very helpful especially in cases where you have been forced to relocate due to a temporary job relocation. 

2. Should I Use A Property Manager? 

Will you manage the property solely or will you need to hire a property manager to do it for you? Typically, a property manager will charge at least 10 percent of the monthly rent and 50 percent of the initial monthís rent when the new tenant moves in. A property manager plays the following roles:
 
• Advertising for new tenants
• Signing leases
• Rent collection
• Keeping track of finances
• File evictions
• Scheduling maintenance repairs
• Issuing legal notices. 

If you decide to be the property manager instead, you will need to do all the duties above yourself. The decision whether you need a property manager entirely depends on you. If you have the ability, time and energy to manage it on your own, then you can save a great deal of cash by doing so. However, if you try and manage without the ability, you might end up spending more money than you could have with a reputable property manager. 

3. What Condition Do You Want The House In? 

There is no limitation to how much improvement you can do to your home before renting it out. The problem is that most people don’t know when to stop, they do not know when the house is good enough. 

Basically, a house should be empty unless you are offering it furnished which is rare, clean and also free from any huge repairs at the time the tenant moves in. Ensure that everything is up to code. Also, have a professional carpet cleaner clean the carpets before showcasing your house.

4. How Much Should You Rent The House For? 

The value of anything does not depend on what the seller wants, but what the market is willing to pay. This means that in the world of rentals, you don’t really set the rental amount, but the market does. Your job here will be to discover what the market will accept for your home and try to get that amount, known as the fair market rent. 

The good thing is that discovering the right monthly rent for your house is not hard at all. The best way to know how much your house should be rented for is by doing a market research. This simply means getting out there and finding out what others in the property rentals industry are charging. Your home will typically rent for about the same price as other houses that are renting in the same location, of same size and condition. To carry out a market research and determine your house ís worth, there are a few places you can look, such as Trulia, Craiglist, PadMapper, Zillow and other online rent services. Other methods are calling property management firms, local newspapers and asking other local landlords. 

5. How Much Should You Charge For A Deposit? 

Basically, a security deposit is the amount of money paid by a tenant to make sure they fulfil the terms of the lease. However, keep in mind that is a deposit and not a fee. This sum should be held in a separate bank account and returned to the tenant once they move out, less any damages they did that need to repairs. 

The amount to charge also largely depends on you, although most states restrict the amount you can charge. In this regard, make sure you check for any local limitations. Most people tend to charge an equivalent of the first month's rent for the security deposit. However, you can charge more if the tenant has anything in their background that may worry you. Backgrounds checks can be done by gathering references for the tenant and checking their credit histories. 

Remember to screen the tenants carefully. As soon as your property is ready to be shown, start searching for a tenant and then choose a tenant very carefully. You will depend on this person to pay rent on time and also keep the home in good condition. Take safety precautions in the screening process. After all the person is a stranger. Once you have found an ideal tenant, as for a security deposit and arrange for a good payment schedule. If you will be cohabitating with this person, it is important that you get to know their habits so that you do not run into any bad surprises. 

Conclusion

Renting out a house to a tenant can be beneficial for both you and the tenant during an economic downswing. However, it can only be beneficial if the homeowners take appropriate measures to prevent possible risks of such an option. After all, it is still your home. 

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