Nowadays shifting to a new place with your family and leaving your home behind is very difficult- emotionally and economically too. You have only two options for your home: to sell it or turn your home into a rental property. In such a case, many of the people didn’t choose the option for sale because of several reasons. Maybe you are not getting the right amount from the property or you are moving so quickly that you don’t have time to set your property up for sale and then deal with numerous buyers, fighting for the right amount. Then the only option you left is to rent your home. In this article, we will explain all the possibilities to turn your home into a rental property. When you decide to rent your home there must be some reasons, the house is a gift to you from your ancestors, or you simply want some extra income. But you must know the risks and the cost along with the rental properties which are explained in this article separately.
How to Rent a House Instead of Selling?
There are plenty of facts that you need to check out when you are deciding to rent your home.
1: Ensure The Property is Allowed For Rent
The very first thing to consider when you are about to rent your home is to check whether the property you are willing to rent out is allowed to get rented out or not. This point is only considered when you take any loan or mortgage against the house you are willing to rent out. It totally depends on the type of mortgage you have taken. Some of the loans might allow the lender to live in the same house for a certain period of time. You can turn the property into a rental home. But some of the mortgages do not allow any investment through the property at all. So you should ask your mortgage agent about your loan (if any) before taking the big step.
2: It Good to Being a landlord and Living in the Same house
You have to decide after renting your home where you are gonna live. As a landlord in the same house to keep your property safe, or far away from your home and give your house to some strangers who are just taking the property temporarily.
It’s advised to choose the first choice to live in the same house if you are not in a state of moving to another city because of any reason. If you stayed in the same house you can take care of your properties on your own and you can also make sure that the tenant does the same. Renting our property definitely becomes a major source of money but the rental property is a treasure to secure for the future.
3: Buy A Landlord Insurance
Once you are relaxed after having a suitable loan for the home now it’s time to think about the insurance plan to protect your family against the liability of being a landlord. Now when the Landlord Insurance topic arises it’s very important to you to know that Landlord insurance is higher than any of the home insurance policies. So, make sure to invest in Landlord insurance for sure. You can also research about the insurance and you may ask any agent about it. They will explain every bit to you and also help you to purchase one.
4: Buy LLC or Umbrella Policy to Protect Yourself
Buying an LLC or Umbrella Policy to protect yourself from any kind of allegation put upon you by the tenant. Sometimes renting your home results in some risk, responsibility, and liabilities along with money. Both the LLC and Umbrella policy are recommended for you, consult the real estate attorney of your state before making any decision because every state has its own rules and regulations.
5: Determine the Rent You want To Charge
After securing yourself with almost every insurance and security it’s time to think about the money part. This is very important to decide how much rent you are going to charge from your tenant. But the charges of rent depend on several things. Consider these points to make up your mind and decide a Rent to charge.
A: Research on the basis of Market
The very first thing is to research on your own, group some market areas and find out the running rate of rental properties. You can also take some ideas from some other nearby landlords about the evaluation of rent while renting your home.
B: Evaluate the Cost of Your Home
After the market research, you need to evaluate the cost of your home and the furniture (if any) you are letting rent. Add all of these costs to the Rent to collect the reasonable profit from renting out a house.
C: Take Consultation from Real Estate Agent
Taking a consultation from a real estate agent would be a good decision. Real estate agents are the person who knows the neighborhood area as well as all the inheritance. They will definitely suggest a reasonable rent for your rental property as well as they will help you out to find a tenant easily.
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6: Set Rule For The Tenants
Being a landlord is a tough job to do and to accomplish this job smoothly you need to set some strict rules for the tenants. If you think that you will manage your tenet with a friendly and flexible nature then you are wrong. If you want your tenant to owe you to live in your house and pay the rent on time then these rules are important to set immediately.
A: The Period of Rent payment
Rent is the first and foremost thing that makes you rent your home and if you are flexible with the timing of Rent payment then you are doing something very wrong that troubles you at some point. You need to set up a time period of 5 to 10 days for the payment of Rent.
B: Maintenance of House
You are renting out a house, that does not mean you hand over your house to some stranger. You must have the right to give the responsibility to your tenant to give some contribution to the maintenance of the house.
C: Garbage Removal
If the area you are leaving has garbage pick-up facilities available then you have to decide who’s gonna pay the bill.
The occupancy is the important rule to set, you are in the state to decide how many people are gonna leave your house. This rule is going to be set as per the bedroom in your house. And also set the rules for pets. If your tenant has a pet then it is up to you to decide whether it is allowed in your house or not. You need to be very clear with your rule that what pets are allowed along with the breed if you have any issue switch any specific breed.
E: Set up the Notice Period
Setting up the Notice period is the most important rule for any landlord that bound the tenant to the property. In the notice period, you are allowed to set a period of a month or more for the tenant where it is clearly stated that when he/she wants to leave the house permanently, has bound to apply and serve the notice period before leaving.
7: Read out the Law Thoroughly
Before renting out a house you need to know the law of landlord and tenant act thoroughly to prevent any kind of mistake. Every state has its own rules and regulations, some states give more privilege to the tenant than the landlord which’s why it is important to get fully informed about the laws of your state before commencing anything.
8: Create An Application Form for Tenant
Creating an application form is another important procedure to follow. In this form, the tenant will fill up all their personal and professional information along with the local guardian information. You need to ask them for their ID to get the police verification and key source of information for screening other tenants.
9: Look for the Tenant
Now you are all set to rent your home and make some real money from it. To find a Tenant you can set a Real Estate agent or can do it yourself either. Looking for a tenant you can print some pamphlets and give them someone to stick all those to related areas. Either you can choose a mouth-to-mouth advertisement that is more effective. In this procedure, your neighbors, friends, and relatives will help you more efficiently.
Hopefully, the above pieces of information are good enough to help you out to rent your home easily. You need to keep the above information in your mind to enjoy the rest of your life as a real estate investor.