Top things to consider when renting your residential property
Renting a home is a great way to make some extra money, but it can also be tricky. If you’re not sure where to start or what to look for in terms of renting out your place, we’ve got some tips that will help.
Figure out your target market
Once you have a good idea of the type of tenant you're looking for, it's time to figure out their demographics. This will help determine how much space they need and what amenities are important to them. For instance, if you have a big property, your preferred tenant would be a family whereas, in the case of a studio apartment, young professionals are preferred.
Set a rent price
When setting your rent price, it's important to consider:
The market rate for similar properties in the area.
The location and amenities of your residential property.
The type of tenant you want to attract. Setting a higher than average rent rate will reduce your pool of candidates to those that can afford it. However, you will need to ensure that your property is appealing to this market.
Make the necessary repairs and renovations
As you prepare to lease your residential property, it's important to remember that the condition of your home will be seen by prospective tenants. If the house needs renovations or repairs and these are not completed before renting, you may have trouble finding tenants.
If you are someone who is handy with the tools, you can fix repairs yourself. However, if you don't have the expertise and want to save some time, it is best to have an outside contractor finish the job. It's important to know exactly what you can and cannot fix yourself. If you mess something up trying to do it yourself, you might end up spending a lot more getting it fixed by professionals. You want the tenants to move into a clean home with fully-functioning amenities.
Be careful when screening tenants
You should always do background checks and credit history checks. You should also check for eviction history, employment history, references and other information that may be relevant to your rental property.
Once you have a tenant in a lease agreement, there are tenant protection laws that go into effect. It is not that easy to evict a tenant and the process can take months. This makes the due diligence you must do upfront even more important.
Assemble all relevant forms
You'll want to assemble all relevant forms in a single folder (physical or digital). Keep the forms organized by tenants, so you can easily find what you're looking for. The forms should include a rental agreement, application, credit check authorization (if applicable), lease and move-in/move-out checklist.
Check the laws regarding rentals
Make sure you understand your local laws with respect to your rental property. Join a local landlord Facebook group to understand the local requirements and speak to other landlords about potential issues.
Calculate your monthly profit
While renting out a property is a great way to earn some extra money, it is also important for you to understand how much you stand to gain from it. Once you have figured out your rental price, you should go through all expenses incurred on the property for the last couple of years and determine what is recurring and what is not. Put the numbers into an Excel sheet and figure out your monthly profit.
In Conclusion
Renting your home is a great way to earn some extra money, but it’s also important to do your research before you do so. You should know what you need from the residential property in order for it to be successful. If you do not want the headache of managing your property, you can always reach out to a property management company.
