Tips for renting out your home
Many people mull over the idea of renting out their homes. They may want the benefit of extra income to save money or pay down bills, or they may choose this method as a way to wait things out until the economy improves. The motives are plentiful, but it's possible for this plan to become more trouble than its worth when appropriate considerations aren't made.
UNDERSTAND THE RESPONSIBILITY INVOLVED! - First you must determine whether being a landlord is an obligation you can even handle. The benifits of renting are numerous, such as the ability to deter the vanalism that often plagues an empty home, the ease of tax breaks and the ability to generate income that covers the bills and possibly even creates a profit.
PREPARE YOUR HOME! - In a down market, you wont be able to get away with renting out the home as it. Tenants are more attentive and choosy in a down market because of the increased availablity rental homes, and their expectations are much higher. - Prepare for the new tenant by thoroughly cleaning your home and making sure any appliances are working and in good condition. Once the house has been straightened out, develop a list describing what makes the house appealing. take note of those commonly desirable features. Use words and adjectives that will help you get a renter.
HIRE PROFESSIONALS! - Renting out your home might seem like a simple task, but it's important to talk with attorneys and other professionals to make sure you are abiding by tax laws and local property rules as a result of new status. For example the IRS stipulates that all rental income must be reported on your tax return. Sure, you may qualify for tax deductions but it's important to know which expenses are deductable. Plus there are limits on how much you can deduct each year and the amount you are able to deduct may differ with the rental activiaty reported on your tax return.
SET A COMPETITIVE PRICE! - Set the cost of the rent by learning what other rental properties are going for in your neighbourhood and community. Remember, potential tenants will be scouting around for deals, so set the rent at a competitive price and make sure you highlights all the most valuble aspects of your home.
SCREEN TENANTS CAREFULLY! - Start looking for a tenant as soon as your property is ready to be shown. Then choose your tenant very very carefully. You need to be abe to depend on this person, not only to pay the rent on time, but to also keep your home in good condition. Also if the person is someone you may be cohabitating with, learn their habits so you won't run into nasty surprises. Don't forget to gather references for potential tenants and check thier credit histories. You should also take safety precautions when screening a tenant - after all this person is a stranger. Once you have found the right tenant, ask for a reasonable security deposit and arrange an appropiate oayment schedule.
THE BOTTOM LINE! - Renting a home to a potential tenant can be beneficial for both parties - but only if homeowners take the time to address and prevent the potential pitfalls of this option. After all it's still your house.
Author: RE/MAX Proprentors