How to Rent Your House Out: 8 Tips to Prepare for Rental
If you’re wondering how to rent your house out, you’ve probably got dollar signs on the brain. Becoming a landlord by renting your home can be lucrative. But how do you prepare a home for rental?
The number of renters in the United States—currently at 40 million—is expected to increase by between five million and six million in the next decade, according to the National Association of REALTORS®. That’s opportunity if you want it. Yet before you post a ‘for rent‘ sign and advertise that you plan to rent your house out, take time to prepare your place. These steps will help you prep your rental property and attract premium tenants.
How to rent your house out
1. Inspect your home
When your home is empty, thoroughly inspect it and repair major problems. Address potential problem areas including roof leaks, sagging or clogged gutters, driveway cracks, leaky faucets or pipes, electrical outlets, and burnt-out light bulbs. Also, inspect your floors to make sure they are sound.
2. Think safety
Tenants will feel more at ease if they have a safe place to live. If you’re renting out a portion of your home, secure and separate the rental area from the rest of your home. Ensure smoke detectors are in good working condition. Equip the kitchen and each floor of the home with a fire extinguisher.
3. Clean up
Nothing will turn off a potential renter more than a dirty place. Clean the floors, windows, and blinds. Shampoo the carpets to remove stains. Repaint walls with a neutral color to make the rooms seem cleaner and brighter.
4. Evaluate your furnishings and appliances
Cleanliness applies to furnishings and appliances, too. If you have valuable furnishings or fixtures you don’t want stolen or damaged, remove them. If you are providing a furnished home, make sure everything you provide is in working order.
If you are providing appliances, ensure they’re clean inside and out. Keep in mind, renting a home with appliances may allow you to boost the rental price, but it can cost you if the appliances require frequent repairs or maintenance.
5. Determine how to manage renting out your house
If you are planning to manage the rental yourself, then secure a legal lease document for you and your tenant to use. If you’re not going to manage the home yourself, give yourself time to find a reputable property management company.
Property management firms typically charge 4% to 12 % of the monthly rent for their services, but they will screen potential tenants, manage repairs, collect rent, handle IRS payments, and deal with evictions if needed.
6. Notify your mortgage and insurance companies
It’s important to contact your mortgage and insurance company to let them know you won’t be living in the home. Your mortgage company has certain rights to the home to protect its security interests. Once you’ve notified your mortgage holder of your intent to rent out your home, you may have to meet specific mortgage-as-landlord requirements. You should switch your homeowner’s insurance policy to a landlord property insurance policy to cover any losses due to tenant’s negligence, natural disasters, fire or water damage.
7. Determine market value
Once your home is ready to rent, figure out your monthly costs and evaluate comparable rental properties in the area to determine your list price. When you post your ad for rent, you’ll want to highlight desirable features to help sell the property to prospective renters. Be mindful of times of year that are more attractive to renters—March through August are typically the best times to locate a tenant, according to RentalsOnline.com.
8. Screen potential tenants
Once you identify a potential tenant to rent your house out to, ask them to fill out an application listing their name(s), employer, previous landlords and references. You’d also be wise to note their Social Security number and get a signed authorization to check their credit reports and criminal history. Be aware of landlord and tenant rights, which vary by region but legally govern fair treatment.