7 Things to Know Before Renting Out Your Property
Tips for Homeowners of Short Term and Long Term Rentals
Whether you’ve decided to move and use your home as a rental property or you invested in a house specifically to rent, you need to know about seven things in particular before having tenants occupy the home. Educating yourself about these ahead of time can save you a lot of frustration, work, and money.
Key Things to Know
Follow the steps below and you will have a much better chance of avoiding potentially disastrous mistakes. Whether it be headaches or avoiding a lawsuit, the best practices avoid it in the first place.
Even if you find outstanding tenants on paper, no one is going to treat your home the way you do. That doesn’t mean the right renters won’t work hard to take good care of your property. It’s just that since it doesn’t belong to them, the level of care will never reach your standards. When renting a house, apartment, or condo, you can’t expect perfection.
As the property owner, it’s your responsibility to maintain homeowner’s insurance in Florida. That covers only the structure itself. If there are any outbuildings on the property, you can have those added to the policy.
However, it’s the tenant’s responsibility to maintain renters insurance to cover their belongings inside of the home. As part of renting to someone, you should require them to have basic renters insurance at the minimum.
Determining the Amount of Rent Due
When renting a property, you can’t just pull a number out of your hat. Well, you could, but that would probably have a huge impact on finding well-qualified tenants. Instead, it’s best to conduct research to determine what other landlords are renting similar houses for in the same area. If you know a real estate agent, they might be able to help.
Rental History, Background, and Credit Checks
As a landlord, these three things are a must. For starters, you want to make sure you rent to people with a history of making their rental payments on time and taking care of the property where they live.
Second, you don’t want to end up with someone in your home who’s a convicted criminal of a serious offense. Yes, everyone deserves a second chance, but if you’re not careful, the wrong tenant could cause you tremendous problems. Third, someone with bad credit could put you in an undesirable financial situation. That doesn’t mean everyone with bad credit makes a poor tenant, though. It does show they lack either the ability or responsibility of paying their debt.
Know the Law
Surprisingly, a lot of people who rent out houses have no clue what the law demands of them. To avoid getting into any kind of legal trouble, whether checking the background of potential renters or solving problems once you have tenants, you need to have some understanding of what the law requires of you as a landlord.
As an example, you have the right to install a home security system. However, you can’t have cameras operating inside, which would constitute an invasion of personal privacy for the tenants.
You can only use cameras on the exterior as a way of monitoring your asset. For this, a DIY home security system works amazingly well. Another positive aspect of having a home security system is getting a discount on your homeowner’s insurance in Florida. If you have any questions, talk to an attorney.
Determine Overall Cost
Renting a property is a great way to develop a second stream of income. At the same time, you’ll have expenses. After all, to get and keep good tenants, you want to make sure they have a safe, comfortable place to live in. When something breaks that’s listed in the lease as part of your responsibility, you’ll have to pay to have it repaired or replaced. That could be anything from a ceiling fan to a washing machine.
Depending on your agreement with the renters, you might also be liable for keeping the grass mowed and bushes trimmed. To protect yourself and your tenants, be sure to outline every detail in the lease. That way, no disputes arise as to who is responsible for the cost.
Creating a Lease
Unless you have experience with this, it’s to your advantage to have an attorney assist. The lease becomes an iron-clad contract that details everyone’s responsibilities and expectations. For instance, if you want the rent paid on the first of each month and then charge a $50 late fee after the fifth, the lease needs to clearly explain this.
When drafting a lease, it’s imperative that you cover the specifics. Some of those include the length of the contract, the amount of security deposit, the monthly rental amount, the rent due day and late penalties, rules of behavior, pet policies, and eviction terms. Ultimately, the lease eliminates any guesswork for both parties.
Become a Successful Landlord
To succeed as a landlord, you need an excellent lease, qualified tenants, and a property that’s both safe and comfortable. Along with you maintaining homeowners insurance in Florida, you should require the tenants to have renters insurance. Also, to protect your asset, consider installing a DIY home security system. With everything in place and compliance with the law, there’s no reason why you can’t develop a healthy and long-lasting relationship with the people you rent to.