How to Turn Your Home Into a Rental

Data show that individuals, rather than businesses, account for more than 70% of landlords in the United States. If you are one of these investors, you may feel overwhelmed by the amount of work involved. Fortunately, working in a methodical way makes the process easier. The following outlines the steps required to rent your home successfully.

Understand the Business Aspects

Before you spend any money on renting out your home, it is important to understand the tax implications of owning a rental property. The most important thing to know before getting started is that all rental income is taxable. Keep up with receipts for all rental-related expenses so that you can accurately calculate your income at tax time.

Many landlords choose to create a limited liability company for each rental property to protect their personal assets. There are fees and regulations associated with forming an LLC, and you will have to be careful about keeping your personal and business finances separate.  

Prepare the Home

Whether you are fully remodeling or doing minor updates, make design choices that have broad appeal. Go for neutral colors and modern finishes.

Make sure the plumbing, electrical, and HVAC systems all work properly. If necessary, hire qualified professionals to complete repairs. Here are some recommendations. Check that windows, doors, cabinets, and drawers all open and close smoothly.

Before showing the property to prospective renters, thoroughly clean the inside and outside. Steam carpets, mop hard floors, and scrub surfaces. Mow the lawn and rake the leaves. If necessary, pressure wash the driveway and exterior of the home.

Find Tenants

There are many ways to market your property, including on free and paid advertising sites. When using these sites, make sure to include all standard information as well as a description of any features that make your property stand out. Post high-quality photos. Listings with floor plans provide renters with even more information. Give prospective renters a business card. This tangible advertisement is less likely to be overlooked than an email. Find a business card maker that simplifies the process and allows you to customize the card to your specifications.

As the applications start flowing in, screen tenants to ensure your renter will not be a problem. Run credit reports and background checks. Verify income. Ask for references from past landlords. If you are dealing with a first-time renter, consider accepting employers and professors as references.

Be a Good Landlord

If you are a good landlord, one who fulfills all duties and treats tenants with respect, you are more likely to establish successful tenant-landlord relationships. Make sure you understand all your responsibilities. These include maintaining open lines of communication and being responsive to tenant concerns. Complete repairs in a timely manner.

If one-on-one dealings with tenants are too stressful or time-consuming, outsource those tasks to a property manager. Keep in mind that this person will be the ones tenants most associate with the property. If they have a negative experience, they will be less likely to renew their lease or recommend you to friends and families. Choose an experienced manager with good references, and be sure to verify his or her credentials.

When deciding to rent out your home, there are many things to consider. Breaking the process into manageable steps helps owners make sure everything is done correctly and create the best landlord-tenant relationships possible.

Katie Conroy

Advicemine.com :: kc@advicemine.com