How to Successfully Rent Out a House
In this article we will focus on how to successfully rent out your house. Unfortunately, we will not be focusing on short-term rentals such as those offered on Airbnb. Rather, we will discuss longer-term rentals for properties that are solely purchased as rental properties.
What should I know about investing in rental properties?
There are some different factors to take into consideration depending on who you plan to rent to. For example, you may rent to students if you are in a student neighborhood. Or, you may be looking to rent to young adults and families looking for a more permanent place of residence. However, a lot of the points are common to any tenant:
Rent Price: You will want to set a price that is reasonable compared to other properties in your area. Searching on sites like Zillow, Kijiji and others will help to give you an idea of what other people are able to charge. Of course, this will be in relation to the size of the property or unit, as well as other factors. Determine whether you will include Internet, cable and utilities as part of the costs. You can also decide to not offer those services at all and require that your tenant covers them. Consider whether renters will have private or shared access to laundry facilities, bathrooms and kitchens. All of this will play into the price you are able to charge for a unit.
Finding Tenants: There are many methods you can use to find tenants looking to lease your rental property. Many commonly used online websites facilitate communication between landlords and tenants. My favorite for the Canadian market is Kijiji, but there are lots of other options out there too. You can also try traditional tactics like posting ads in the newspaper or on bulletin boards. Get creative in thinking about the best way to reach your ideal tenant.
Picking the Right Tenant: There are a variety of techniques you can use to ensure that you are renting to the right tenant. The very first step would be to gauge their personality the first time you show them around the property. That takes care of whether you think they will be respectful and responsible in your unit. The other matter is of financial concern. You will want to find a tenant that will pay rent, and on time. A credit score and proof of employment are a couple methods to ensure payment, as well as requiring first and last month’s rent. If you do not think that the tenant will be able to cover the rent, you can require that they have a co-signer. This is a very common practice with student rentals, since parents cover the rent (or at least some portion of it). This acts as a guarantee that this person is responsible for the payment of rent if the tenant is unable to meet it. You can find guarantor agreements online by doing a quick Google search.
Ensure the Place is Livable: In order to even rent it out in the first place, people must be willing to live in the unit. As such, you will want to repair anything that could be a safety hazard, as well as make sure that appliances and smoke alarms are fully functional. We strongly urge you to take care of this ahead of time to avoid any issues later down the road.
Understand Everyone’s Rights: Know your rights as a landlord, as well as the rights of your tenants. You don’t need the hassle associated with violating any rights and having tenants be eligible for early termination. On the other hand, you will also want to know your rights to terminate any leases early for negligent behavior and charge the money you deserve. Finally, there are certain limitations as to how much you can raise rent prices. Understand these rates so you can get the best value for your investment.
By considering each of these tips when deciding to rent a property, you are setting yourself up for the best chance of success. Take the time to consider how you can implement these recommendations before diving in.
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