These days, it’s not only B&B and hotel owners who can make money over the holiday period. With the rising popularity of property rental platforms, anyone can be an entrepreneur – renting out spare rooms, beds or their entire house to make a bit of space cash.
Renting out your home may seem like a good idea. That is, until the tenant trashes the house, inside and out, and you have no one to oversee the repairs. Sure, renting out a home can lead to plenty of headaches, but there may still be good reasons to stick the “For Rent” sign in your front yard. They may include increased cash flow, potential tax benefits, appreciation over time and flexibility to sell later.
But before you hand over your keys and welcome your paying guests, be sure to check your insurance policy to make sure you’re adequately covered. Also, check that your policy is up to date and that there’s nothing in the rental contract that could cause a claim to be rejected.
Before you post a “for rent” sign and advertise your rental property, take the time to prepare your place. These steps will help you prep your rental property and attract premium tenants.
Inspect your home
When your home is empty, thoroughly inspect it and repair major problems. Address potential areas including roof leaks, sagging or clogged gutters, driveway cracks, leaky faucets or pipes, electrical outlets and burnt-out light bulbs. Also, inspect your floors to make sure they’re sound.
Tenants will feel more at ease if they have a safe place to live. If you’re renting out a portion of your home, secure and separate the rental area from the rest of your home. Ensure smoke detectors are in good working condition. Equip the kitchen and each floor of the home with a fire extinguisher.
Nothing will turn off a potential renter more than a dirty place. Clean the floor, windows and blinds. Shampoo the carpets to remove stains. Repaint walls with a neutral colour to make the rooms seem cleaner and brighter. Make the perfect first impression with Airoma’s Essence range. Infuse your home with the romantic perfumes of rose and lavender and create an ambience of harmony and happiness.
Evaluate your furnishings and appliances
Cleanliness applies to furnishings and appliances, too. If you have valuable furnishings or fixtures you don’t want to be stolen or damaged, remove them. If you’re providing a furnished home, make sure everything you provide is in working order. If you’re providing appliances, ensure they’re clean inside and out. Keep in mind, renting a home with appliances may allow you to boost the rental cost, but it can cost you if the appliances require frequent repairs or maintenance.
Determine how much rent to charge
Get an idea of rent amounts by checking newspapers, online resources or neighbourhood rental signs. Be realistic about rent levels. The rent may be lower than your mortgage payment, but if you want to find a tenant, the rent must be comparable to what’s on the market.
Determine how to manage the rental
If you’re planning to manage the rental yourself, then secure a legal lease document for you and your tenant to use. If you’re not going to manage the home yourself, give yourself time to find a reputable property management company. Property management firms typically charge four to twelve percent of the monthly rent for their services. They’ll screen potential tenants, manage repairs, collect rent and deal with evictions if needed.
Notify your mortgage and insurance companies
It’s important to contact your mortgage and insurance company to let them know you won’t be living in your home. Your mortgage company has certain rights to the home to protect its security interests. One you’ve notified your mortgage holder of your intent to rent your home, you may have to meet specific mortgage-as-landlord requirements. You should switch your homeowner’s insurance policy to a landlord property insurance policy to cover any losses due to tenant’s negligence, natural disasters, fire or water damage.
Determine market value
Once your home is ready to rent, figure out your monthly costs and evaluate comparable rental properties in the area to determine your list price. When you post your ad for rent, you’ll want to highlight desirable features to help sell the property to prospective renters. Be mindful of times of year that are more attractive to renters.
Screen potential tenants
Once you identify a potential tenant, ask them to fill out an application listing their names, employer, previous landlords and references. You’d also be wise to check their credit reports and criminal history. Be aware of landlord and tenant rights, which vary by region but legally govern fair treatment.