Renting Property

house for rent

Renting property can be an extra income, or debt, or just cover the mortgage on the property you can’t sell.

My husband and I rent a single home residence, so we’ve learned a few things about renting property. First, follow the golden rule. Tenants are real people and need to be treated as such. Now to answer some basic questions.

What do I do first?

Make sure the house is in good repair before you rent. The landlord is legally responsible for maintaining a safe living environment. This means that all appliances are working, all holes are repaired, no insect infestations, no mold, and so on. Otherwise, the tenant can sue the landlord. For example, one couple rented a former drug house and the landlord said it was their responsibility to clean it. This couple could sue their landlord for renting a house full of drug needles.

How much do I charge for rent?

Take a look and see what similar places are renting for in the immediate area. Consider what amenities your property has or doesn’t have. Keep in mind that the rent generally needs to cover monthly mortgage payments, insurance, extra for repairs, and maybe a property management company. I can’t repeat how important it is to have a small buffer for any repairs.

How do I write a housing contract?

You don’t need a lawyer to write out a contract. You can buy contract packages for each state that already follow that state’s landlord/tenant laws. These packages also contain move-in/move-out forms, and so on.

Determine the terms in the lease. Can they have pets? Is the tenant responsible for mowing the lawn? And so on. There are some things that you cannot put in a contract. I’ve seen illegal terms such as the landlord can’t be sued, or a tenant pays for any legal fees a landlord incurs in a legal case. Only put legal and honest terms in your contract.

Where can I advertise my property?

Stick a sign on the front lawn. Put up a message on local classifieds, craigslist, and other places. You can also ask for references from acquaintances or hire a realtor to look for a tenant.

How do I choose a tenant?

Do credit and reference checks on prospective tenants—even if it is your mother. You’re checking to see if the tenant can afford rent and is respectful of property and other neighbors.

You can refuse a tenant based on a person’s payment history, and breaking certain laws. Fair housing laws make it illegal to refuse housing to someone based on gender, race, ethnicity, and sometimes sexual orientation.

If you choose to rent to friends or family, be aware that this can put a strain on any relationship. You both need to know this is a business relationship. Sometimes, you want to help someone out, but do it wisely. If you charge less, make sure you can afford it!

Is the deposit mine?

That’s tongue and cheek. The deposit belongs to the tenant. You just set it aside until the person moves out. Then you can take out whatever clean-up fees, etc., there are. In the meantime, you can put the money in a savings account and earn interest. The interest is yours.

Should I hire a property management company?

This is sometimes a good idea if you don’t live near the property, are too busy, or don’t have the know-how. They take the guesswork out of it.
A property management company will either take a set monthly fee or a percentage of rent. The company will also put aside money for repairs, collect rent, coordinate repairs, and keep an eye on the property.

Overall, renting property is not easy, but you can take some headache out of it. Hopefully, this can clarify some of your questions.

More comprehensive resources
http://www.rentingmyhouse.net/
http://www.biggerpockets.com/renewsblog/2013/01/04/how-to-rent-your-house/

Eileen Davis (Guest Blogger)

Eileen Davis (Guest Blogger)

I'm a crazy redhead. I have three hyperactive boys and a wonderful husband. I earned my BA in English Language from BYU. I grew up in Southeastern Utah in the middle of nowhere. I now reside by a big lake in Utah.
Eileen Davis (Guest Blogger)

Latest posts by Eileen Davis (Guest Blogger) (see all)

One Response to Renting Property

  1. Justin says:

    Wow, this is a really comprehensive article and is definitely what someone who is interested in renting out their property needs.

Leave a Reply

Your email address will not be published.

Enter your name and email address to subscribe to Mommy's Money Saving Tips and receive notifications of new posts by email.