According to research, the rental industry for single-family homes is at an all-time high.
In fact, the increase in rentals is SO immense that yearly sales of homes have dropped in excess of 5%.
Nearly 50% of all landlords electing to rent these types of homes only have one rental unit. In many instances, they are new to the rental business.
If this describes you, it is important to understand that the “ins” and the “outs” of renting out your home can be highly challenging.
If you have a desire to jump into the industry, continue reading to learn 5 things that will help you with the endeavor.
You Must Have Some Type of Financial Backing
When you become a landlord, you have to have either a backup money fund or a way to borrow money fast.
You may find yourself with a tenant that becomes unable to pay their rent, but your mortgage and upkeep on the property will still need to be paid. Also, you may find yourself needing to make a quick emergency repair to the property.
Before starting, you should have – AT LEAST – six months’ worth of rent in a special fund.
To protect yourself, it is best to work with a property manager. These professionals can help you with the creation of an emergency fund and the proper allocation of those funds when it becomes necessary.
A Home Inspection is a Must
Prior to choosing to rent out your home, it is imperative that you have a home inspection done. This will provide you with the general value and overall condition of the structure.
If repairs need to be made, you can go ahead and get those out of the way.
Even though you will be renting, you want to make sure your home is safe, habitable, and is attractive to your potential tenants.
Property Management is Crucial
When you decide to rent out your house, it is important to enlist the assistance of a property manager.
If you fail to do this, you will – essentially – be on call 24 hours a day, 7 days a week, for forever!
A property manager will charge only a small percentage fee and will handle a multitude of tasks for you.
These include screening prospective tenants, handling those overnight repairs, collecting rent monies, and handling any legal issues that you may face.
It is well worth the percentage fee in order to have the peace of mind that your property is being tended to without you – yourself – being stretched to the point of exhaustion.
Outline Tenant Responsibilities Upfront
In the State of Colorado, you have many legal responsibilities when renting out your home; however, you are able to outline the responsibilities of your tenants in your rental contract.
Examples may include keeping the property clean and free of debris, mowing the grass, and eliminating weeds from around the structure.
You should always outline your expectations and ensure that your tenants agree to those expectations; otherwise, you will find yourself having to handle the tasks yourself – which will put a damper on your time and your money.
Get Your Insurance
When you rent out your home, it is important that you obtain landlord insurance. Now, you can expect this to be up to 25% more than your standard homeowner’s insurance; however, it is well worth the investment.
This type of insurance can help cover physical damage done by environmental conditions, coverage for any on-site personal items, both medical and legal expenses should someone incur an injury on the property, and even the loss of your rental income, under certain conditions.
Your rental is a business and it is imperative that it is properly insured. It not only protects you – as the landlord – but, it also protects your tenants.
Let Us Help
Starting a rental business can be an exciting undertaking; however, it comes with its fair share of challenges.
We here at Pioneer Property Management offer the tools, expertise, and resources that you need to achieve success. Our fees range from 7% to 10% of the amount that you charge monthly.
We offer a multitude of services that include – but are not limited to – investment property evaluation, rental marking services, tenant screening and selection services, fielding all tenant/maintenance requests, and an online portal for monthly statements.
We make the process of renting your house easy!
For more information, contact us today