How to Rent Your Property Tips
Read these 19 How to Rent Your Property Tips tips to make your life smarter, better, faster and wiser. Each tip is approved by our Editors and created by expert writers so great we call them Gurus. LifeTips is the place to go when you need to know about Rental Home tips and hundreds of other topics.
How to Rent Your Property Tips
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How Can I Learn What to Charge for Rent for My Home Rentals?
If you're a relative newcomer to the home rentals industry, this question may puzzle you. Sure, you know what your mortgage payment, real estate taxes, insurance, and water charges are, but does that relate to what to charge for rent? The answer is both yes and no, to varying degrees. First, become familiar with the two primary methods used to set rent prices.
- Return on investment. Calculate your monthly costs, including mortgage payment, taxes, insurance, water, and an amount for maintenance. Add an amount you'd like for monthly profit, too. The resulting number is what you might like to charge to rent your property. That may or may not be possible depending on the second, more accurate method of determining rental amounts.
- Market analysis. This method should always be used to learn about your competition. And you do have competition. Knowledge is power; use it to your advantage. Learn what similar properties in your area cost to rent. The keywords are “similar” and “your area.” If your rental home is 2,200 square feet, compare it with other similar sized homes of comparable design. Do not bother analyzing 3,500 or 950 square foot homes. Only compare similar home rentals in your immediate area as that is where your prospective tenants want to live.
You don't want to set your rent too high or all you'll have is a vacancy that can quickly turn into a money pit. Setting the rent too low will attract more potential tenants, but you'll have to screen more carefully and more often. And you might still lose money. Set your rental price within your current market in your area and you'll locate just the right tenant.
What Home Rental Legal Items Should I Learn Before I Rent My Home?
There are many terms that can make the language of home rentals a bit confusing to the newcomer. If you've decided to rent your property, you'll need to understand a few major and many minor legal and working phrase definitions. Here are a few to get you started:
- Screening a prospective tenant. The Fair Credit Reporting Act (1970) regulates the handling of information regarding everyone's credit activity. As a landlord, you are permitted to obtain credit information on an applicant to help you make a good rental decision.
- Lease agreement. You probably realize you need a good lease agreement to properly administer home rentals. But do you know what should be in it? There are standard lease form agreements that may basically cover you and your tenant. At other times, you may need to add certain paragraphs to address other issues about conditions of tenancy. Consult your attorney to ensure you have a good agreement.
- Security deposit. The amount usually equals at least one month's full rent and is held in escrow by the landlord. Make sure that the language in a security deposit agreement or the paragraph in your lease agreement specifies that this deposit is NOT your tenant's last month's rent, even though the amount may be a perfect match. These funds are to be used if you (the landlord) need to make repairs for actions of your tenants. Typically, when your current tenants are about to move, you can “walk through” the property together and agree on what, if any, repairs (and use of their security deposit) are necessary.
- Eviction procedures. Sure, we hate to talk about the possibility of eviction, but, as a landlord, you should be aware of the local procedures that must be followed should you ever need to take this action. Procedures can differ widely from state to state. Rules and regulations are normally made by individual states, sometimes cities and towns, and, at times, there is little consistency. Learn the procedures in your area.
There are some other legally related terms and phrases which you will absorb as you get further into the adventure of renting your property. A word of caution: Don't try to become a legal expert. Consult with a qualified attorney about any but the simplest legal issues you face when you rent your property.
How Should I Decide If I Should Rent My Home Instead of Selling It?
A number of factors typically will influence your decision to sell your home or place it in a home rentals database. In most cases when the economic environment is positive, you'll often decide to sell your home. Receiving cash from the sale and using it to invest in another property is often the best course of action.
However, there are circumstances that might lead you to decide to create a rental home instead. A "down" market, as has occurred in the early years of the 21st century, has persuaded many to rent instead of sell their homes. When prices of real estate fall, you may be better served by renting your property until the market reverses and prices rise again.
One basic rule you might want to consider: If you can earn a decent profit choosing to rent your property and then earn an excellent gain by selling it in the future, this strategy may work for you. Recent well-publicized problems in the real estate market may indicate that you should consider renting in lieu of selling your home. When the market turns up, as it will, you may then want to reconsider your rent or sell decision.
The bottom line: When the market is good, you'll probably choose to sell. If the market is in stagnation or a downward spiral, you may want to rent for the short term. But if you want to have real estate income and long term gain with the favorable tax treatment that goes with it, you may want to rent regardless of the market.
What insurance do I need for a rental home?
If you have decided to rent out your home, contact your home insurance company and find out what home insurance is recommended if you are renting out your home. Since you own the home you will want to make sure that the home is insured, but you do not need to insure the items owned by tenant's inside. You should recommend that the tenants get renters insurance to insure their personal possessions. It is also highly recommended that you get legal insurance on your rental in case your tenant or one of their guests try to sue you or the tenant ruins you entire home.
Do I need a realor to rent out my house?
When your house is ready to be rented, you then have to find suitable tenants to live in your rental home. You can either do this on your own or find a real estate agent to help. A real estate agent will have more experience advertising your rental home and finding potential tenants but, will charge you a fee for this service. Real estate agents will also guide you and potential tenants through negotiating and signing of the lease. It is a good idea to weight how much time you have to devote to renting the home yourself verse what you would pay in realtor fees, to help you make the decision.
Should I tell my neighbors I am renting my house?
If you have lived in the home you're renting, make sure to inform the neighbors you have moved and are renting your home. You will not want to alarm the neighbors by having strangers around the house.
Even if you are renting out a home you never lived in, it is a good idea to make friends with the neighbors and ask them to keep an eye on your new tenants. So remember to inform your neighbors and give them your contact information for emergencies.
How can I figure out what to rent my house for?
If you decided to rent out your home, there are many things you have to take into consideration. One of the first hurdles potential landlords have to face is the idea of having “strangers” live in their home. You will have to decide if you will rent the home out furnished or unfurnished, figure out what the “going” rent is for rentals in your area and then find suitable tenants.
It is a good idea to start looking at other rentals in the area to see what they are renting out and what they are charging for rent. You will want to look at rental properties that offer similar set ups as the home you will be renting. This is the best way to find out what you can get for renting out your home.
What should I include in my rental home with rent?
When you decide to rent out your home, you will have to consider what utilities you will include with the rent. It is a good idea to include heat and hot water, so that you can help ensure that the heat will not be turned off in the rental and there will be less a chance of frozen pipes.
Other common utilities that are to be considered include:
- alternative energy
How Should I Market My Home to Get It Rented Quickly?
Want to rent your property quickly? Charge $200 per month for your 3,000 square-foot exquisite waterfront rental home. Extensive marketing won't be necessary. If you want to cover your mortgage, taxes, insurance, and make some profit, however, you should use all effective avenues to market your home rental. Long term vacancy can be financially damaging. Here are some tips.
- Take flattering pictures of your rental home. Don't just take pictures – take pictures that show the best features of your house rental. If you visit one of the many websites that offer home rentals with pictures, you'll quickly see a graphic definition of “flattering” and the opposite. Even if you don't own a digital camera, an inexpensive disposable unit's prints can be digitized for use on the Internet.
- Use the Internet to its fullest power. There are excellent websites, that can help you market your home rental to a wide audience of qualified tenants. Here is where you'll see the real value of the flattering pictures you took.
- Carefully set your rental price to be within the market range. Perform a market analysis by examining what comparable home rentals cost in your immediate area. These properties are the direct competition for your rental house and the same people will probably look at these and yours. If speed is your primary concern, you might want to set your price at the lower end of the competitive range, if you can afford to do so. This slight discount might give you the edge you need to attract a good tenant quickly.
- Don't be shy; get the word out. Let the world know you are renting your property. While the Internet may provide the best and widest exposure to your rental home, word of mouth and local advertising can still help. Sometimes your personal network of family and friends will tell their friends, who will then visit your website preview and may eventually go further.
Giving your rental house the widest exposure with flattering text and pictures, along with asking for a reasonable market rent, will help you rent your property quickly.
Is There a Way to Know If I’d Make a Good Landlord for Home Rentals?
Many people consider going into the home rentals business but are not sure they would become a good landlord. The answer is typically a combination of some technical and a few “personality” factors. Here are some items to consider.
- Are you prepared to treat renting your property as a real business? It is strongly recommended that you treat every facet of home rentals as a business, like any other. Even if you decide to rent your property to a family member, the transaction should still be handled like an economic event and not a personal one.
- Are you prepared to make or contract with someone to make repairs, sometimes in an “emergency” situation, when needed? Will you have the financial ability to pay for either materials or professionals?
- Are you prepared to be congenial but business-like, with access to an attorney, accountant, and any other professional you might need to assist in your business? Do you understand that tenants are not your friends, but clients/customers? Are you ready to both enjoy the good times and be a strong business owner to solve problems should they occur?
Being a successful landlord can be a rewarding, pleasant, and, sometimes, easy experience. At other times, it requires you to be a firm, principled, and dedicated businessperson. If you are committed to being successful with the maximum enjoyment and resolution to be firm when necessary, you can become a wonderful landlord.
What Is the Best Way to Market My Home as a Vacation Rental?
There are a few simple, probably obvious factors to consider if you want to successfully enter the vacation home rentals business. Before you actively market your rental home, consider the following.
- Is your rental house in an area that will attract a wide variety of vacationers? Obvious? It should be, but at times this basic requirement is overlooked. While it is not technically impossible for a family of four to want to spend two weeks on a farm in Nebraska, the variety of the market may be limited. When you compare this property to a two bedroom rental house on Cape Cod, within ten minutes of four beaches, you can be sure the potential market for this property will widely outstrip the market for the former.
- Assuming you're going to rent your property on a short term basis (from a few days to around two weeks at a time), are you prepared to completely clean and refurbish your house at regular intervals? Owners sometimes forget that, although their rental homes are fully equipped with furniture, utensils, flatware, linens, and towels, short term vacation renters often don't have the time or inclination to undertake a major cleaning as they're rushing to leave on time.
- Unless you're a mystical sage or soothsayer, you should be prepared to screen and qualify all prospective tenants. Assuming you're not going to have a long term vacation tenant, you'll be required to perform quite a few screenings, which can become a bit tedious, but necessary, nonetheless. It could cost more than your 14 days' rental income to fix tenant problems that may arise.
Once you realize the necessities of successful vacation home rentals, expose your property to the widest audience possible. Competition for cost effective and quality vacation home rentals can be quite heavy. Perform a market analysis (to know what your competition is charging) and make your house rental sparkle to attract the best vacation tenants. You may enjoy the experience as much as the rental income you'll receive.
Should I “Screen” All Potential Tenants for My Home Rentals?
Whether you are a landlord with multiple home rentals or a home owner who has decided to rent his/her property because of market, employment, or personal conditions, you should consider "screening” (qualifying) every potential tenant who's interested in renting your property.
Why? While you'd love to completely trust in the statements and representations of the people who may be interested in renting your property, prudence dictates that you should be careful to whom you rent your property. Screening your potential renters will help protect both your asset (your home) and your monthly income (the rent).
Screening or qualifying your potential tenant simply involves getting verification of the statements and representations they've made to you. Screening can include the following actions.
- Getting a credit report. Do they pay their obligations on time and as agreed? Was there a problem that is now resolved? Are they having a current problem?
- Do they work for the company they've indicated they do? Do they earn sufficient regular income to pay the rent? Ask for verification.
- Does a background check indicate they are upstanding citizens? Or have they had a problem in the past that might affect their ability or desire to pay their rent on time? Does anything indicate they may not maintain your house rental as you would like?
Most potential tenants, particularly the ones you'd most like to rent your property, will have no problem providing verification of the statements they've made to you. Even those that might be a bit “difficult” will deliver independent verification of their willingness and ability to pay the rent as agreed, should you ask. And you should. You'll sleep better and your bank account will be happy.
What Is the Best Way to Rent My Home?
There is really no hard and fast rule regarding how to rent your property. Much depends on the following circumstances.
- What is the condition of the real estate market?
- For how long are you considering making your property a rental home?
- Have you done a market analysis or a return on investment projection for your rental house?
- Have you thought about the marketing efforts and methods you might use?
In the end, the best way to rent your property is the method that results in getting good tenants, found in the shortest period of time, so you have income instead of a vacancy. This "best" way could be as simple as telling your friends and family that your property is now a rental home. This method costs little or nothing and sometimes works well if your “network” knows of quality people wanting to live in your neighborhood.
While this marketing “strategy” may work, if it doesn't, you could face a long vacancy that is always expensive. Normally, a much better plan is to get as much exposure for your rental house as possible so the maximum number of potential tenants can "see" (using descriptive language and digital pictures) your home rentals. Just as it's difficult to win the lottery if you don't buy tickets, it's more difficult to rent your property for the right price if you don't expose it to as many potential tenants as possible.
With the strength of the Internet and the assistance of Rentals.com, you can get the best exposure to the widest audience possible. The wider the audience, the more likely you'll find the right tenant willing to pay the right price for your rental home.
Make sure to take an inventory of all the items in the home for rent before the tenant moves in. It is also a good idea to walk thru the rental home with tenant and note any damage in the rental, so that your tenant will not loose security deposit for something they did not do.
Should I allow pets in my rental house?
If you decide rent out your house, one thing you will want to consider is if you will allow tenants with pets. If you decide to accept pets in your rental home, you may want to take an extra pet deposit to help cover any costs of damage a pet may make. Depending on the type and size of the pet, the damage may vary. Pets may damage any woodworking and molding, soil carpets, and scratch up walls of any unfurnished apartment.
How should I treat my tenants?
When renting out your home it is important to remember that your tenants have rights and you have to abide by them. You should make sure that you exchange contact information with your tenant and discuss how to handle any repairs that need to be made. You should treat your tenant how you would like to be treated if you were living there. You are not allowed to enter a tenants home without permission unless it is an emergency.
Should my rental abide by any codes?
Before you rent out your house, be sure to make sure your house is up to code with all the local health and safety codes. Your rental home should be a safe and well maintained building, in accordance with all the rental laws. Your must provide your tenants with clean safe home and ask them to return the rental in the same condition.
Should I sell or rent my home?
If you are trying to decide whether you should sell or rent your home, there are many factors to consider.
Do you have adequate funds to be able to afford two houses? Would the home do well for rent and what is the rental market like? Who will manage the property? Who will make repairs and find tenants? It is a good idea to look at all the options and what is involved with both selling the home and renting out the house. There is a lot involved in renting but depending on the housing market, it maybe worth more to hold the house if you can afford it and the market is slowing down.
The Internet has become a great resource for homeowners with a house for rent. Homeowners can find a great deal of information on the home rental process as well as advertise the rental home on internet listing services featuring rental houses to find potential tenants for their rental home. It is well worth renting your home yourself; you can always call a residential property manager if you feel you need more help.