Homeowners are finding out what it means to be a landlord after failing to sell their homes in this unstable time in the housing market. With home prices down nationwide, other homeowners are deciding to not take the loss and instead have chosen to rent their properties.
Rismedia.com offers a few tips and different options for homeowners who are forced into the new world of being landlords. There are a number of pros and cons to becoming a landlord, just make sure you are familiar with both before you decide to enter the rental market.
- When it comes to who will handle the transaction you can choose to do it yourself or you can hire a real estate agent, who will be able to help with a number of things you might not think about, including background and credit checks.
- Do NOT be too turned off by tenants with bad credit. They have eliminated their biggest expense, their mortgage. Take references into consideration if their bad credit scares you a bit.
- It’s reassuring to know that rental market prices have not fallen nearly as much as the sales market. There are plenty of people that have lost their homes, which means… there are lots of renters in demand.
- Rental properties also appeal to a lot of tenants because a majority of the time they are “move-in ready.” If you have decided to rent out your house that you have been unable to sell, it will be very appealing to tenants who will know that the property has been lived in recently.
- Call a private investigator. For less than $50 you will find out if your potential future tenant is a dead beat or has a clean record when it comes to paying rent on time and being a responsible tenant.
- Have a lawyer review the contract, if you’re using a standard lease contract, to avoid any surprises.
- Make sure to have proof on employment and double check, there’s nothing worse than thinking your tenant will be able to pay rent, and finding out they don’t even have a job!
- Avoid taking paper checks. This will cut down on the possibility of being scammed. Ask for wire transfers or direct account deposits.
For those landlords who are not particularly familiar with the rental market there are a few additional tips when it comes to keeping things LEGAL!
- Security deposit cannot exceed 1.5 months rent. If monthly rent is $600, the security deposit cannot exceed $900.
- Include the duties of each party in the lease, including the dates that the lease is active, rental amount, and how repairs/maintenance will be taken care of.
- As a landlord, you can evict tenants for damaging the property.
- Make sure to know if your community has a rental permit fee.