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ContinueLearn 9 essential steps to renting out your house for the first time, from prepping your property to finding tenants and managing rent.
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Rental business is a great way to earn an extra income and if you're here, you're probably already thinking, “Is renting my house the best thing to do?”
From our experience working with many property owners, we can tell you that renting your house is a great alternative to selling—for its potential of a steady cash flow. However, the rental business requires careful consideration and planning, otherwise, it can become more trouble than the money is worth.
This article will cover everything you need to know as a prospective landlord to navigate the intricacies of a rental business, offering you 9 tips on how to rent out your house to have a smooth rental experience.
What separates most successful landlords in the rental business from the rest is proper planning and management strategy. That's why a good starting point for beginner landlords is to create an efficient strategy that would give you a smooth rental experience.
You can choose to either stick with the old system of pen-and-paper landlording or outsource your property management by hiring a property manager.
However, we recommend you employ a do-it-yourself approach using property management software. This strategy is particularly efficient because of the control, reduced stress, assured legal compliance, and reasonable cost of these rental management solutions.
If you're looking for an ideal property management software, consider Landlord Studio. Sign up today to take the first step toward being a successful real estate investor.
For newbie landlords, the first step to renting your house is to prepare your home for potential tenants. This involves ensuring that your property is clean, safe, and compliant with local housing codes—warranty of habitability.
Start by giving your home a thorough cleaning and checking that all appliances are functioning properly and in good condition. If you're renting out a specific room or area within your house, make sure it can be secured from the rest of your living space to ensure privacy for both you and your tenants.
As a landlord, it's essential to familiarize yourself with the local, state, and federal laws governing landlord-tenant relationships. Understanding these regulations will help you navigate the rights and responsibilities of both parties involved in the rental process.
Some of the key areas of rental law you should know include security deposits, rental applications, tenant screening procedures, and lease agreements. Noncompliance with these laws can lead to significant legal issues, so stay informed and adhere to all applicable regulations.
Useful Resources: Landlord-Tenant Laws by State
Setting the right rent price can be one of the most challenging aspects for new landlords. You want to strike a balance between attracting tenants and ensuring that your rental income meets your financial goals.
To determine a competitive rent price, consider using online tools like Rentometer or Zillow Rent Estimate. These platforms can provide you with valuable insights into rental price trends in your area, through a thorough market analysis.
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One of the ways to find prospective tenants to rent your house is to create an engaging listing that includes high-quality images of your property, a concise description, and the rental price. You can then post this listing as an advertisement on reputable websites and in local newspapers to ensure it reaches as many potential tenants as possible.
Consider using Landlord Studio to help you find tenants fast and manage the screening process all in one convenient platform.
Additionally, you might choose to work with a real estate agent who can assist in finding tenants. Keep in mind that agents typically charge a commission for their services. Alternatively, hiring a property management company can relieve you of the day-to-day responsibilities of renting out your home, although this option comes with its own costs. Management fees usually range from 8% to 12% of the monthly rent, along with potential additional charges.
When evaluating potential tenants, it’s crucial to carefully review each applicant’s screening report. This report provides valuable insights into their credit history, eviction records, and any criminal background. To gain further perspective, reach out to previous landlords for references about the applicant’s rental behavior.
While the screening process may require some time and financial investment, many tenant screening platforms like Landlord Studio offer bundled reports that can save you money.
Landlord Studio provides comprehensive tenant screening reports tailored to your state. These reports include credit scores, rental history, background checks, and eviction records. Best of all, you can receive these reports in as little as 30 minutes, starting at just $45.
Pro Tip: Before creating your rental application screening applicants, be sure to familiarize yourself with your area’s state and local laws. This will help you avoid any violations of landlord-tenant regulations.
Useful Articles: The Landlord's Guide To Tenant Screening, Rental Application Fee Laws By State.
Timely processing of rental applications is crucial, but it can be challenging, especially if you’re dealing with paper applications or multiple submissions at once. However, selecting the right tenant based on their application and screening results is one of your most important responsibilities as a landlord.
You have the right to deny an application if the applicant does not meet your income criteria or minimum credit score, among other reasons. It’s essential to provide a clear rejection letter outlining the reason for denial, ensuring that your explanation complies with local landlord-tenant laws.
Useful Articles: A Guide To Rental Applications For Landlords [+Free Template], Rental Application Fees: Do’s and Don’ts.
Typically, landlords require tenants to inform them of their renewal intentions 60 to 90 days before the lease expires. If no notice is given, the lease may automatically convert to a month-to-month agreement at the current market rate, although this can vary based on your preferences and local regulations regarding renewals.
When drafting your lease agreement, it’s wise to include details about the lease renewal process and outline the steps tenants should follow if they choose not to renew.
Having an efficient and secure method for collecting rent online is essential. While it may be tempting to stick with traditional paper checks, utilizing rent collection apps simplifies the payment process for tenants and helps you track rental income more effectively. These apps allow you to schedule payments, send automated reminders, and set up late fees.
Tenants can benefit from platforms like Landlord Studio, which automates rent payments to help prevent defaults. Additionally, payments processed through Landlord Studio automatically update your rental property accounting dashboard with details about the payer, total amount, date, and transaction type.
Once you’ve signed a lease with a great tenant, it’s vital to stay on top of maintenance issues in your property. Addressing these concerns promptly helps prevent further damage and ensures that your tenants have a habitable living space. However, managing maintenance requests can become overwhelming, especially if you own multiple rental properties.
Consider using Landlord Studio to streamline this process or manually log maintenance requests as needed.
A successful tenancy hinges on cultivating a strong landlord-tenant relationship. This involves promptly responding to tenant inquiries, addressing maintenance issues without delay, and respecting their privacy.
Fostering a positive relationship with your tenants can significantly increase the likelihood of lease renewals, helping you avoid the challenges of turnover and extended vacancy periods.
Before you decide to rent out your house, it's essential to assess your ability to handle the responsibilities and risks that come with being a landlord. Consider your financial situation, the time you can dedicate to property management, and your willingness to learn about the rental process.
While renting out your home can offer significant financial benefits, it’s also important to be aware of the potential challenges. By weighing the pros and cons, you can make a well-informed decision and set realistic expectations for your journey as a landlord.
Whether you’re a first-time landlord or looking to enhance your existing rental business, Landlord Studio provides the tools you need for success.
Our platform simplifies property management with features that include tenant screening, online rent collection, tax reporting, and rental accounting.
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