The ABCs of Renting Your Property to Tenants: A Beginner’s Guide
With the slowdown of home sales in the real estate market, more homeowners are stuck with homes that they thought would sell and they are now considering renting those homes to tenants.
This is to be expected because many homeowners have already moved on to bigger and better properties even though their first homes didn’t sell.
Thankfully, even though the real estate market has slowed, the good news is that homeowners work through this difficult situation by renting out their properties until the real estate market picks up again.
Keep It Simple
You might think that renting your property to tenants is risky and stressful. But if done right, it can be a source of additional income as well to filter out the right tenants without being directly responsible for maintenance and repairs.
You may not want to hear it, but being a landlord isn’t easy. It involves taking on responsibilities that you probably don’t want or expect to deal with. However, with the right preparation and management, you can do so while avoiding some of the risks inherent in renting your home to strangers. With this guide, you’ll learn everything you need to know about renting your home as an investor and what you need to consider before signing on the dotted line.
Find The Right Tenants
After deciding what type of tenant, you’re looking for, you should do some research on the local rental market.
This will help you to create a profile of the kind of tenant you want to attract and give you a better idea of what your rental property will be worth in the open market. – Where to look for information. The best way to research the rental market in your area is to get your hands dirty. This means looking at rental listings on websites like Craigslist, Zillow, and Trulia.
You should also attend local real estate investor clubs, visit rental property management companies, and talk to property managers in your area. – What to look for. When researching the rental market, you should pay special attention to the following factors: – The average rent in your area. – The average vacancy rates. – The average length of time that a unit is on the market. – The average cost of repairs. – The average rental yield in your area.
Step 2: Know Your Rights as a Landlord
When renting out your property, you are essentially putting your money into a partnership with your tenants.
But the law doesn’t treat you as a partner—instead, you get almost none of the benefits of a partnership. So, before you even sign a rental contract, you should know what your rights are as a landlord and what your tenants’ rights are as renters. – Liability for injuries and damage. As a landlord, you are liable for injuries that your tenants sustain on your property, and you are responsible for all damage. This applies whether the tenant is at fault or not. If a tenant breaks something, you are responsible for repairing or replacing it. If someone gets hurt on your property, you are responsible for their medical bills. This can lead to lawsuits, fines, and even imprisonment. – Your right to enter the property.
As a landlord, you have the right to enter your property to conduct repairs, inspect the property, and/or show it to prospective buyers. However, you must let your tenants know that you’re coming and provide them with a reasonable amount of time to get their things out of the way. You can’t enter a rental property without a legitimate reason or without the tenant’s consent.
Step 3: Advertise Your Property and Select Tenants
You have done the legwork to find a great tenant and are now ready to start looking for a place to rent. But before you sign a lease, you need to put yourself in your prospective tenant’s shoes. What kinds of questions will they have?
What do they need to know before committing to rent your property? – The right way to advertise your property. The best way to advertise your property is by posting an online listing on a site like Craigslist or Zillow, and then following up with phone calls and emails to interested parties. You should include the following in your listing: – When you’re ready to sign a lease.
When you’re ready to sign a lease, you should meet with your prospective tenants and hammer out all the important details so that everyone is on the same page. You should discuss the following: – Written rental agreement. You should sign a written rental agreement with each tenant. Your rental agreement should include:
Step 4: Set the Right Terms for Your Contract
You’ve found the tenant of your dreams and have signed a rental agreement. But you aren’t quite done yet. You need to make sure that you have everything covered in the rental agreement so that nothing goes wrong, and your tenant is happy.
Security deposit – A security deposit serves two functions: it’s a partial payment of the final rent and its insurance for you (the landlord). A security deposit is a money that you take from a tenant at the beginning of a rental agreement. If your tenant breaks their contract (for example, they don’t pay the rent) then you can keep their security deposit. At the same time, you must deposit 10% of the security deposit in a state-approved escrow account.
The terms of the lease – The terms of the lease are especially important because they set the stage for the relationship between you and your tenant.
Your lease should also include terms for when rent is due, how it should be paid and when it’s considered to be late. This is by far one of the most important parts of your lease because tenants must know that they are expected to pay rent on time each month.
Step 5: After Finding Excellent Tenants
Congratulations! You’ve found wonderful tenants who have agreed to rent your property and you have signed the lease.
Now it’s time to kick back and relax, right? Nah. You still have a lot of work to do.
Stay in contact – While you don’t want to be a nagging landlord, you want to stay in contact with your tenants so that you can look out for their best interests and vice versa.
Send them a friendly text or email every few months to check in and let them know that you’re available if they need anything.
Be a good landlord – Being a landlord isn’t easy. But it is rewarding when you find good tenants and they treat your property with respect.
Step 6: Hire A Property Manager
If your goal is to keep living your life without the hassle of owning a rental property, then the best decision you can make is to hire a property management company like Rent Portland Homes – Professionals.
Our property management team will save you the time and money of managing your property yourself so you can continue living your life while leaving the property management to us.
To learn more about the property management services we can offer you, contact us today by calling (503) 447-735 or click here to connect with us online.