Has your house, or condominium unit been up for sale for longer than you expected? Have you decided that perhaps selling for a profit might not be in the cards at this particular time? Have you fully considered your options?
Whether finding yourself with a vacant property on your hands is due to a job transfer, an inheritance, or some other reason beyond your control, turning your vacancy into a viable income stream by renting it out just might be the solution to your dilemma.
Regardless of the reason, you’ll need to prepare yourself financially, and the property physically, before you should begin the rental process. The following tips address often overlooked issues that are key to properly transition your unwanted vacancy into a profitable rental.
1. Repairs and Upgrades
Your rental needs to both look good and be in good working order.
- Completely cleaned — even in those out-of-the-way nooks and crannies.
- Fresh paint goes a long way.
- Don’t neglect the exterior, yard, and entryway.
- Free of odors.
- Everything works.
2. Insurance
Your regular homeowners’ insurance may not be enough now that your property is to serve as a rental. Be absolutely sure that you notify your insurance provider, inform them of your intention to rent out the property, and ensure that your coverage is adequate.
3. Determine How Much Rent to Charge
If you ask either too much or too little, you are starting off on the wrong foot. Get off to a good start by researching the rent rates of comparable rental properties in the immediate area. Scan newspapers, internet ads, and call on “for rent” signs. A competent professional property manager can be an invaluable asset in terms of rental pricing.
4. Finding and Screening Tenants
Too many would-be landlords want to take the first warm body that comes by waving a dollar bill — BIG mistake! The following background checks should be performed on all prospective adult occupants:
- Credit checks through a major financial reporting company.
- Nationwide criminal background check.
- Eviction check.
- Employment verification.
- Employment verification.
NOTE: The faster a prospective tenant wants to move in, and the more cash they wave in front of you, the warier you should be!
5. Use a Professionally Prepared Lease
Are you a real estate attorney? Is your spouse a real estate attorney? Are you intimately familiar will all federal, state, and local laws and ordinances that come into play with respect to housing and rentals? If not, what makes you qualified to evaluate a lease’s efficacy?
One of the biggest mistakes novice landlords make is to download a lease from the internet or use a lease that a well-meaning friend or neighbor gives them. Do you realize that one wrong sentence, or one essential, but omitted clause, can cost you THOUSANDS of dollars and subject you and all you own to almost unlimited liability? Only use a professionally prepared lease that you know for a fact has been proven to hold up in court in your jurisdiction.
6. Consider Hiring a Property Manager
If you will be relocating more than just a few miles from your property, or if you have neither the time, nor inclination to deal with busted toilets, late rents, or possibly evictions, then consider a professional Sarasota property management company to handle your rental.
A professional property manager will handle all of the tenant screening, leasing paperwork, rent collections, maintenance calls, and bookkeeping for the property. The time and money saved by leaving the process to professionals very often offset the money you are likely to lose by attempting to go it alone — hiring a good property manager typically pays for itself.