5 Steps to Take Before Renting Out Your Home

 

 

If you are transferring your job or your in the military and have to PCS to another town, there are many good reasons to keep and rent out your house.

You want an investment property to supplement your income, you hope to return to it later, or you don’t have enough equity in the home sell right now without taking a loss.

Before you start, there are some things to do before placing that “for rent” sign in the yard. Begin with this quick list, and then visit our other blogs to learn more.

1) Research and understand the legalities

Renting out your home requires some knowledge of the law. Familiarize yourself with Georgia (or whatever state you’re in) Fair Housing laws, as well as the Federal Fair Housing Act at HUD.gov. This law protects buyers and renters from being discriminated against during real estate transactions.

While you may be familiar with the idea that you can’t (whether purposely or inadvertently) make decisions regarding selling or renting housing based on race, color, religion, national origin, sex, disability, and familial status, it’s important to note that, though you may mean well, you also cannot advertise your home with wording like “childless couples preferred” or “looking for military members to buy home.”

Also, research landlord and tenant laws for Georgia (or your state). There are rules of conduct; legal rights for landlords (and tenants) that govern rental property operations and how to settle disputes, including eviction procedures.

2) Decide — property manager or DIY?

Before you start renting out your home, decide if you’ll use the services of a property manager or professional landlord for tasks like screening tenants, securing a lease, communication with tenants, and maintenance of the home. Using a team like, Double D property Solutions, can be an especially appealing option for long-distance and overseas landlords like military personnel. A typical fee is a percentage of the monthly rent collected, depending on the services provided. While most property managers will require a reserve fund (usually around $3000) to cover repairs before you leave, we don’t require reserve funds and we will even pay for a portion of the upfront repairs required to get your house rent ready. This is cheaper for you allows you to concentrate on your move.

Still, it is possible to manage the property yourself from a distance, though it is a good idea to have a local friend or family member watch the house in case of emergencies. Realistically, if you’re in a different time zone, will you truly have the time and energy to respond to a tenant needs? Can you drive back if the water heater starts leaking? The cost of time and gas alone can make Double D property Solutions your savior.

3) Put the property’s best foot forward

Tenants are looking for move-in ready, clean homes. Some updates to pay attention to:

  • Remove/replace old carpeting
  • Adding hardwood or engineered wood flooring
  • Repainting in neutral tones
  • Bathroom/kitchen updates
  • Fix small repairs you may have overlooked, such as:
    • Leaky faucets or showers
    • Running toilet
    • Holes in drywall.

After repairs and maintenance have been completed, clean the home professionally. Prospective tenants will open every closet door, look in garages and storage areas, and inspect appliances. If there is a problem, prospective tenants will find it.

4) Paperwork!

Of course, being a landlord requires good documentation. If you’re using the services of a property manager or professional landlord, they’ll handle some (or all) of this step for you. This is a partial list of the paperwork you’ll need to have or change before you start renting your house.

  • Convert your homeowners insurance to a landlord policy- Homeowners policy will not pay a claim if they find out you don’t live there anymore.
  • Tenant screening (SmartMove is a great resource for this)
  • Home warranty (if you have one) paperwork is up to date
  • Log of income and expenses for maintenance and repairs- Excel, Turbo-Tenant, etc.
  • State-specific lease, including:
    • Military clause and reverse military clause
    • Requirement of tenant purchasing renters insurance
    • Monthly rent and what’s included (any utilities, etc.)
    • Guidance for cosmetic changes the tenant may wish to make
    • Pets allowed, pets upon approval, or no pets
    • Landscaping service provided or tenant responsible for landscaping
    • Parking permit provided or tenant is responsible for parking permit
    • Rules of conduct
    • Dispute resolutions

US legal forms has lease templates that can be customized. Remember to check with your local state rental laws to comply tenant/ landlord regulations and the Fair Housing Act.

5) Think like a tenant.

It’s go time! Take a final walk through (with your inspection checklist). Look at it through the eyes of a potential tenant. Have a friend walk through and give you a third party assessment. Some other information you can leave behind to help create the best experience for your renters:

  • Renters guide
  • A “rental binder” highlighting amenities — include takeout flyers or info about local stores and restaurants
  • Operation schedule for filter changes for the HVAC and possibly appliances such as the refrigerator
  • Property manager or your contact number and email

For more information about making your house an investment property, contact us.

Good Luck

 

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