Steps for Renting Out Your Home

renting out home, H&K Insurance Agency Inc. Watertown, MARenting out your home can be a great financial option. Maybe you need to move, but you haven’t found a buyer for your previous home yet. Or perhaps you can’t afford your mortgage payments, so you’re going to live with relatives until you can get back on your feet, so you rent out your home to cover the costs. Or maybe you have a second home that is not always occupied, and you want to make some extra cash.

However, renting out your home can be a daunting task. Since it is your home, you may have emotional attachments to it, which makes it more difficult to lease it to strangers. And most people that rent out their home have zero experience when it comes to being a landlord. The following tips will help you rent out your home successfully.

 

  1. Determine the Price of Rent

Look on Craigslist and in local papers to see what others are charging for rent in your area. Take into account a variety of factors such as proximity to public transportation, size of the home, number of bedrooms, etc. The best way to find a good tenant is to ensure that you price the home as fairly as possible.

  1. Find Good Tenants

The best way to ensure that the leasing process goes smoothly is to find a good tenant. You want someone you can trust to pay their rent on time every month and not trash the house.

It may sound like the best way to find a tenant that you can trust is to rent to friends or family. However this is actually a bad idea. The problem with renting to your friends or family is that if they run into financial problems, it’s going to be a lot harder to kick them out. If your niece rents out your home but then loses her job, will you kick her out if she can’t make rent? It’s a lot easier to follow your own rules when it comes to a stranger. Mixing business and friendship can be a bad financial decision.

Perform a background check on all potential tenants, and ask for bank statements and pay stubs to ensure that they will be able to cover the cost of rent. As a rule of thumb, it’s a good idea to choose a tenant whose gross income is about three times the monthly rent. They should also have a good credit history. You may also want to ask for past landlord references.

  1. Draw Up the Lease

Many lease templates exist online, however, make sure to always run the document past your attorney before having a tenant sign it. Bigger Pockets suggests including the following in your lease:

  • Names of tenants
  • Address of the rental property
  • Lease term Length
  • Rent amount
  • Security deposit amount
  • Late fee description
  • The move-in condition report
  • Provisions for or against pets, utilities, smoking, and more

  1. Know a Handyman

You are going to want to have someone you can trust to go to the house and fix any issues that occur if you aren’t able to do it yourself. This is especially important if you are moving out of the area. If you know a basic handyman, ask if they will be on call for whenever a problem arises.

  1. Change Your Insurance

Your regular homeowners insurance won’t cover you if you are leasing out your home for more than a few weeks of the year. In fact, if you don’t have landlord insurance, your insurance company could deny coverage if they find out that you are renting out your home.

To learn more about landlord insurance and other insurance provisions when renting out your home, contact H & K Insurance Agency in Watertown, MA. We would be happy to discuss insurance options that work best for you and your budget.