There are a number of steps you must take to turn your home into a rental property. From checking that you’re legally able to rent out your space to finding the right tenants, there are many tasks to take care of before renting out your home is possible. Here we break down four of the crucial steps involved in turning your home into a rental property.
1. Look for Your Tenants
You may find potential tenants by posting a property listing ad and stating the types of things you are looking for in a potential renter. Once you’ve compiled a list of interested candidates, you should offer to show your home and then, while doing so, get to know the tenants.
Once you’ve gathered a list of people you’re considering, have them complete background checks so that you can get a feel for their financial, criminal, and rental history. After reviewing this information, you can decide on the best tenant to rent out your home for a successful investment.
Be sure to check eviction history on all potential tenants to ensure that they can pay rent each month and maintain your property however you need, based on however it is outlined in your rental agreement. You can write up professional contracts online and have potential tenants review the information and sign to ensure that everything goes according to plan.
2. Brainstorm Ideal Tenants
When you’re ready to start looking for prospective tenants, take a minute to brainstorm the characteristics of the ideal tenants for your home. You can browse individuals looking for rent online using ad placement websites and searching the ‘rooms wanted’ section. Be prepared to compare rent prices and price-match to gain potential tenants.
3. Be Flexible With Lease Arrangements
If you are willing to be more flexible in your lease arrangement, you can open the door up to additional renter opportunities. For those who need to rent a place without strict terms, you might try to accommodate with month-to-month agreements for those financially preparing for a house.
On the other hand, if your tenant is a licensed contractor, a landscaper, or in general just a handy person, you can offer them insured rent on a discount in return for essential property upkeep services. It is really up to you to decide what you’re looking for in an ideal renter, but there are many ways to go about finding a good person.
4. Is Renting Out Your Home Permissible?
You’ll also want to make sure you’re legally allowed to rent out your home. Depending on where you are with your mortgage, the neighborhood you live in, and any other laws pertaining to your home, you may or may not be able to make money with your real estate investment. Check with all associated parties to ensure that you have the legal right to do so before proceeding with your intention.
There are many legal situations that make renting out one’s home difficult to do. You might need to reach out to your HOA to find out if your home is legally able to be rented out by interested tenants. Furthermore, if you are renting out another space in your home, such as your garage or guest suite, additional laws may apply to whether or not this is legally acceptable.
The Bottom Line
Turning your home into a rental property requires careful insight into the laws of your property and where you are located, as well as finding the right tenants that you’re willing to rent out your home to. Consider the four guidelines in this article as you pursue making the jump from homeowner to landlord!
