What to Consider When Renting Your Home
Property owners who find themselves strapped for cash have the option to sell their properties or put it out for rent to generate extra income. However, renting your home can also turn out to be more trouble than it’s worth if you don’t consider things carefully. As such one must exert effort to learn everything about the trade and prevent losses or feelings of frustration in property rentals. Here is a look at what you need to consider when renting your home.
Landlord Responsibilities. As a property owner, you have to ask yourself if you are ready to handle landlord responsibilities before renting your home. There are plenty of tasks involved in putting a property for rent. This usually includes taking care of all the permits and paperwork, overseeing repairs and maintenance, and collecting rent. Basically you will be in charge of managing the property and ensuring that tenants comply with the terms of the lease.
Costs of Renting Out Properties. Renting your home comes with certain costs like legal fees, increased insurance and taxes, and maintenance expenses. There may also be marketing expenses involved when you put the place up for rent if you want to attract good tenants. Getting the house ready for occupancy may also entail costs for cleaning and repairs to ensure that appliances, plumbing, and electrical are working properly. You have to factor in all these costs in determining the rent to ensure profits.
Taxes and Laws. As they say, ignorance of the law is no excuse. Therefore, property owners should familiarize themselves with tax laws, local property rules, and state regulations on property rentals before renting out properties. Knowing and complying with the law protects your business from legal liabilities.
Risks Involved. Just like in any business venture there are also risks involved in renting your home. You may incur damages accidentally caused by irresponsible tenants or get a tenant that causes a lot of trouble in the community. Damages can range from a simple busted fuse to fires due to improper use of appliances. A poor choice of tenant may also subject your property to vandalism or theft. A full understanding of these risks can help landlords take precautionary measures and minimize such risks.
Contracts and Tenancy Agreement. Aside from screening tenants, landlords or property owners can also turn to contracts and tenancy agreements to manage their risks. These documents also serve as protection for both landlord and tenant in case of misunderstandings or disagreements. Tenancy agreement templates are found online but it is still best to seek professional help in drawing up contracts and agreement. House rules should be clearly stated in the agreement along with consequences for non-compliance.
Moving Out and End of Lease Cleaning. Keep in mind that there is always a possibility that tenants will move out even before their contract expires. Tenancy agreements usually have provisions for timeframe and manner of serving proper notice for moving out and/or eviction. One particular provision that should be considered when moving out is the end of lease cleaning. This is a common area of dispute for bond refunds. Houses that have been professionally cleaned before the tenants moved in are normally required to be serviced by professionals for the end of lease cleaning.