Buying a property to rent
For many different reasons, including the recent foreclosure frenzy, people often find themselves in a position where they own an investment property, and decide to rent it out. They may have tried to sell it and were unsuccessful or perhaps are planning to return to the home in after a period of time. So, you have chosen to rent it out, but where do you start?
First of all, meet with a real estate attorney. Attorneys are not always well-versed in real estate law, and in particular, landlord and tenant laws. A specialist can advise you regarding this, and whether you need to do anything in particular to abide by local state or county laws. The attorney can also assist by drafting a rental application and a tenancy/rental agreement.
There are some things you may want to include if turning your own home into a rental property. If you have any treasured items, such as wall hangings and chandeliers, you may want to remove them. Don’t trust them to your tenants. Make sure the house is clean and presentable for when you bring prospective tenants to look through.
Try to determine a fair market value to calculate rent. Look at what other properties are renting for locally. If you are too expensive you may have difficulty finding a tenant. An estate agent can help you do this, as well as help you get a tenant, but for this you will have to pay a commission, generally one month's rent, once the property is rented. This could be an option for non-local owner or a person that is just too busy to show the home to prospective tenants. Don’t forget about specifying a month’s rent (returnable) as a deposit to cover yourself against possible expense incurred by tenants.
Do some advertising. Use newspaper ads, the Internet or an agent. Even the local store will do.
Have all prospective tenants fill out an application. Are there pets involved? Do they have steady work and a regular income? It may also be an idea to decide whether you want to run a credit-check.