How to Rent Out Property
There is no question that one could describe the current real estate market as a seller’s market. So we wouldn’t be surprised if you were considering how you could get in on the action and benefit.
One way to do this is by renting our current property you own. Whether you wish to become a landlord because you have extra space and want a way to make additional income, or if you are hesitant to fully take the plunge and sell your home for good, renting out property may sound like an excellent fit for you. It’s a concept that initially sounds simple; you buy an existing property (or make use of additional space you already have), you rent it out, and you collect money every month from your tenant. But any expert will tell you that there’s so much more than that when it comes to becoming a successful landlord in the world of real estate.
Here are a few things you need to understand before you become a landlord and rent out property:
Know What You Could Earn
Homelight tells its readers (potential landlords like you) that renting means you have to find the perfect combination of covering your expenses and making money. However, when crunching those numbers, remember that you don’t want to charge an extraordinarily high rent; otherwise, the tenant will never come! Conduct solid market research on rental rates before taking serious steps into renting a property you currently own. What you can realistically get for rent will determine how profitable this can be for you.
Understand the Full Scope of Responsibility
Yes, being a landlord often equates to additional income, but it also means that you are adding a great deal of responsibility into your life. As a landlord, it’s your job to stay on top of unexpected repairs and maintenance, collect rent, pay additional home insurance charges, and monitor your tenant’s housekeeping skills. Investopedia further explains how the IRS (Internal Revenue Service) requires that landlords report accurate rental income on their tax returns, including a Minimal Rental Use rule. This rule states that if a dwelling unit was used as a residence and rented for fewer than 15 days, the landlord does not receive the tax benefits from deducting expenses that would typically decrease taxable income.
Choose the Right Tenant
When it comes to renting out your existing home or other property you own, it’s all about who you choose to have living in and taking care of your space. That’s why a thorough screening of potential candidates is crucial for getting the most out of this experience. While biggerpockets.com details how yard signs and websites such as Facebook and Craigslist are dependable ways to market your property, your screening process before your in-person meeting is crucial. It’s best to go about this by setting rental criteria and explaining the criteria over the phone. Typical criteria include proof of employment and gross monthly income equating to three times the monthly rent, a favorable credit score, and solid references from previous landlords. Conducting a background check is also a good idea.
In today’s complex and competitive real estate market, becoming a landlord is often much more complicated than simply choosing to rent out your property. You need someone to help you ensure that you and your property are as protected and secure as possible and that this decision is financially beneficial to you. That’s where John M. Braham, your local, expert real estate agent, comes in. Whether you are in a rental, are looking to purchase, or are hoping to list your home in the Sumter area, John M. Braham Real Estate Agency of Berkshire Hathaway HomeServices has an expansive resume and rock-solid integrity.
For more information on how John M. Braham Real Estate Agency can help you, contact the agency today! Follow their Facebook page for more helpful hints on how to rent out your property and how to navigate the always-changing world of real estate.