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7 Things to Do Before Renting Your House

While renting your house out may seem as easy as posting an ad on Craigslist, we recommend that you set aside some time to prepare for you new business venture before you leap into the world of finding and managing tenants. Here are seven essential steps that every new landlord should take:

1. Get an Insurance Policy

Purchasing landlord insurance (also known as rental property insurance) is one of the most important steps to take before renting your home. In addition to the things covered in a typical homeowner’s policy, landlord insurance will protect you from major damage done by tenants, as well as from legal actions they may take against you. Be aware, though, that rental property insurance will not cover your tenant’s personal property—they’ll need to purchase rental insurance to cover their belongings.

2. Enlist an Accountant

Assuming you’re not an accountant or deeply familiar with rental tax laws, it would be wise to enlist an accountant to help you sort through the tax implications of renting your house. An accountant will help you  figure out what records you’ll need to keep in order to navigate Schedule E come tax time. He or she can also help you figure out how to minimize your tax bill by helping you choose the right depreciation strategy.

3. Have a Lawyer Review your Lease Agreement

A real estate lawyer can help ensure that your lease agreement does not contain any illegal provisions, while also protecting you from the financial harm that could result from tenants exploiting loopholes in your agreement. A good lease agreement will specify the ways tenants can and cannot use the property, how many people can occupy the rental, what insurance is required, who is responsible for paying utilities, and what will happen if the tenant doesn’t uphold his or her obligations.

4. Establish Criteria for a Tenant

Working with in Fair Housing Act guidelines, outline a set of criteria your rental applicants will need to meet, and put these down on paper to hand out to potential tenants when you show them the property. These criteria should include acceptable monthly income levels and credit scores and the number of tenants who may occupy the house. You should also lay out your smoking and pet policies.

5. Get Your Paperwork Ready

Beyond the lease agreement, there are a number of forms you’ll need to have on hand before renting your house out. These include rental applications, credit check authorization forms, any disclosures your state requires, move in checklists, move out forms, and various notices to tenants.

6. Get a Home Inspection

Having your home inspected by a professional will help you fix any critical maintenance issues before your tenants move in. This will help protect you from potential legal issues, while also saving you from having to answer multiple maintenance phone calls within the first few weeks of renting your property.  Having home inspections both before a tenant moves in and after he or she moves out will also provide third-party documentation of any damage caused by the tenant.

7. Clean, Paint, and Landscape

There’s no substitute for a through deep cleaning and a fresh coat of paint when it comes to brightening the interior of your rental home. While trendy upgrades may be optional, if you want to attract the most qualified tenants, this basic rental hygiene is required. Likewise, it’s important to make sure that the lawn and garden surrounding your rental house is neat and tidy before you post the “For Rent” sign.

| March 22, 2012 More

Finding Tenants: 12 Creative Rental Marketing Strategies

Creative rental marketingAs any experienced landlord will tell you, vacant rentals are expensive. Assuming you have a mortgage to pay, it’s likely that any vacancy lasting more than a couple of months will essentially cost you a full year’s profit on your rental.

Given this reality, skilled property managers use a diverse range of marketing tactics in order to fill vacant rentals within 30 to 60 days. Here are some professional tips and tricks that you can use to find a qualified tenant within a comparable amount of time:

Use Great Signage

One of the easiest, most cost-effective ways to attract interest in your property is to create good “for rent” signage. “Good signage”:

  • Looks professional: We’ve all seen the “for rent by owner” sign that features sloppy handwriting scrawled on a piece of scrap plywood, which is then propped haphazardly against the mailbox. While this certainly is eye-catching, it doesn’t leave the best impression of you or your rental. Typical “for rent” signs are available at hardware stores, but they don’t leave much room to include information. For best results, consider ordering an inexpensive, custom-made sign from a service such as BuildASign.com.
  • Is visible from the street: Take a cue from professional realtors and make sure to locate a sign near the street. You can use a reader board for this purpose. If you really want to go for the gusto, attach some balloons to your sign.
  • Contains key rental property details: Be sure to include key information such as how many bedrooms the house has, what the monthly rent is, and whether utilities are included. A phone number and email address round out the “must have” information. If you have the space, you can list other key features, such as recent upgrades and other attractive amenities.

Tap Your Network

Professional rental agents aren’t shy about putting the word out when they have a new rental property available, and you shouldn’t be either. Take advantage of your circle of acquaintances to generate some free, or low-cost, advertising.

  • Email friends and family: While other means of contacting your nearest and dearest are okay, too, email’s key benefit is that it can be easily passed on. Be sure to include some photos of the rental house, along with a compelling description of its features. With any luck, your mail will forwarded on to one or more potential tenants.
  • Send postcards to the neighbors: Have 100 postcards made and mail them to all the neighbors within a few-block radius of the home for rent. These people have a vested interest in putting a responsible tenant in your property, and beyond that, may jump at the chance to recommend that a friend move close by.
  • Put up flyers at local businesses: This technique is an oldie but a goodie. Find community bulletin boards where you can post flyers. Grocery stores, coffee shops, and community centers are logical targets. If you live near a college or university, don’t forget the student center and/or admissions office.

Use the Internet

There are multiple ways to use the internet to advertise your available rental:

  • Time your Craigslist ads: A recent Zillow study shows that houses listed on a Friday get many more viewing, and sell much faster than, houses listed on other days. No doubt, the same holds true for rental houses. Don’t be afraid to repost your ad several times—most professional rental agents do.
  • Create a website for your rental: Applications such as WordPress make it easier than ever to create a website in an hour or two—so why not make a site dedicated to showing off your house. If you use targeted keywords (including the terms “rental house,” “house for rent,” and your area), you’ll likely get some traffic.
  • Post a video tour on YouTube: Create a short video tour of your rental house and post it on YouTube, making sure to use targeted keywords in the image tags. You can make the video part of the website, and/or point to it from your Craigslist ad and social media accounts.

Open Your House

By far the most convincing way to sell potential tenants on the prospect of renting your house is to let them view it. While this can certainly be done by individual appointment, the more opportunities you give the casually curious to view the rental, the more interest you’ll create. Here are some creative ways to attract viewings:

  • Leave the blinds open: If you’ve got the “for rent” sign up, and no cars are parked in the driveway, it’s likely pretty obvious that your rental house is vacant—so why not go ahead and pull the curtains back and let curious passersby have a look?
  • Host a social event at the house: Whether this takes the form of a party or a garage sale, having people over increases only helps your chances of renting your house quickly.
  • Time your open house right: If you do decide to have a traditional Sunday afternoon open house, time your event to start an hour earlier or end an hour later than local open houses are traditionally held. That way you’ll create a window in which you can have the open-house going crowd all to yourself.
| November 28, 2011 More

Should I Hire a Property Manager?

It’s often difficult for new landlords to decide whether or not to hire a property manager to help them fill vacancies, manage tenant relationships, and maintain their rental property. Many assume that hiring someone to manage their rental property will cost a lot of money, which is especially unattractive to those who have become landlords through circumstances such as not being able to sell their home.

In reality, though, hiring a property manager can actually not only save you time, but money as well. While they generally only charge 8-15% of your monthly rent in exchange for their services (which amounts to $96.00-180.00 on a $1200/month rental, for example), hiring a management company allows you to delegate all the work association with owning a rental.

Tasks that property management companies typically handle include:

  • Finding and screening tenants
  • Drawing up lease agreements
  • Collecting rent
  • Property maintenance, including the hiring and supervising of outside contractors as needed
  • Emergency response
  • Conducting periodic property inspections
  • Handling lease violations/evictions as needed
  • Accounting
  • Preparing annual tax statements

If all of that sounds like a lot of work, that’s because it is. If you choose to manage your own rental property, plan to set aside at least 10-12 hours a month to devote to these tasks, keeping in mind that you’ll essentially be “on call” to deal with some of these things as they arise, as opposed to being able to take care of them when it’s convenient for you.




| October 26, 2011 More