Renting your home out to others (if you’re able to do so) might seem like a good way to earn some extra money and indeed, it can be. However, there are some things you will need to be aware of and things you need to do first.
This is especially important to organize when you want to rent out your home. If a tenant causes any damage, you do not want to be paying a fortune to fix it! Tenant insurance will protect you, not only from this, but also if the tenants try to take any legal action against you. This will not, however, cover your tenants or their own belongings. They will need to be aware that they will have to take out their own policies in order to be insured.
A lawyer and an accountant will both be useful in helping you navigate the legal and monetary implications of renting your home. A lawyer will help you draw up a lease that is sound and fair to both you and the tenants. An accountant can help with taxes, working out what you will have to pay each year.
Agree on Terms
Lay out an idea of the type of tenant you want. Will you allow smoking? Pets? Children? How many tenants can live there and how much will they pay? These are only some of a few dozen questions that you will have to ask yourself and decide on before going ahead. Make sure that these terms are clearly down on paper and agreeable to any potential tenants before they sign the lease.
Make Sure Your Home Looks Good
Of course, you will want your home to be a place that other people will want to rent. Get an inspection done by a professional to ensure there is nothing that needs repaired and get any necessary maintenance out of the way before renting. This also has the benefit of protecting you from any potential complaints. Make sure your house looks good before opening it for viewings. You don’t have to do anything drastic; a deep clean, some fresh paint and making the garden presentable will suffice.
Make sure all the documentation is in order on the lease and other legal and financial matters, such as insurance, both for you and your potential tenants. Run a background and credit check on anyone applying to rent your property to ensure everything is legitimate.
Renting your home, like buying or selling it, can be a big step. It can go badly or smoothly depending on how organized and thorough you are and what kind of tenants you have. It is your property and so ultimately, your responsibility. If done correctly, however, it can be an easy process and more importantly, a good extra income.
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.