Nowadays, there are many ways of generating passive income. One way that is becoming more common is converting your home into a rental property.
Although this is an exciting way to earn more income, converting your home into a rental property is not so simple. There are many technical details that you need to consider. However, it is possible to gain the proper knowledge and make it successful.
Once you iron out all the kinks, you can definitely enjoy the rewards of having continuous income from your rental property.
Here are some processes you need to take on to start your rental property business:
Search for Tenants
To be successful at the rental property industry, you must be able to find quality tenants who will stay for the long-term. To do so, you have to
conduct proper tenant screening. You should review credit reports, employment information, criminal background reports and ask for landlord references.
When assessing a prospective tenant, you also need to have a good grasp of the Fair Housing Law to avoid being reported and penalized.
The Fair Housing Law protects certain classes against discrimination. You must adhere to the regulations and avoid asking for information that can constitute as discrimination. Different states have their own version of the Fair Housing Law and you need to be properly guided.
Conduct Property Repairs and Upgrades
Walk through the home you intend to use as a rental property.
Evaluate the following areas:
- Curb appeal
- Landscaping
- Repainting
- Roofing
- Insulation
- Heater
- Air conditioning unit
Here are some questions you can also consider:
- Is there too much clutter?
- Can add more cupboards and closets for additional storage space?
- Does the house need renovation in the kitchen and bathroom area?
- Do you need to hire a pest control company to get rid of insects?
- Is there mold presence you need to address?
- Does it need to be upgraded?
- How old are the furnishing?
- Do you need to buy new appliances that are more energy efficient?
- Do you need the unit to be professionally cleaned?
Obtain the Right Insurance and Rental Property Permits
Before operating a rental property, there’s paperwork to get through such as permits and insurance.
Landlord insurance is useful as it protects property and reduces liability.
There are accidents that might occur in or outside your property that you have no control over. In order to prevent being sued by these situations, you can the right insurance will shield you. For instance, if a natural disaster occurs, your worries will be greatly lessened if you have insurance. Property damages resulting from fortuitous events will be covered and you can file a claim as a safeguard against tremendous financial losses.
Before welcoming your first tenant in your rental unit, the local government will be conducting necessary inspections. This is where permits must be acquired to start operating legally. Some of the inspections that may be performed include building safety codes and hazard prevention. They need to ensure that renters are protected. Sanitation will also be inspected and adequate garbage disposal system will be part of the assessment. Only when you’re cleared, you start your rental business operation and accept renters.
Set your Rental Price
Before anything else, you need to evaluate the value of your rental unit. Find out the rent prices of the homes around your area that are similar to yours. It should be competitive. If your rental price is too high, chances are, few will be interested. The ones who are interested will likely be unreliable when it comes to rental payment.
If you price your rent too low, there will be plenty of prospects, but you’ll also miss out on lucrative income. Remember that property maintenance expenses can be costly and you need to deduct this from your income. That’s why being able to set the right rental price is vital as a property owner.
Hire a Property Manager
One of the best ways to seamlessly convert your home into a rental property is to get the services of a reputable property management firm. They can take care of everything as they have the expertise and experience needed. They are also efficient and work in a professional manner. Their range of property management services is excellent giving you plenty of options that will match your unique needs as a landlord.
Do you need assistance in marketing a vacant unit? Are you more interested in tenant screening services or having an efficient rental collection? Maybe you need more help on maintaining your property or handling records. This is where property managers can offer their topnotch services. If your rental property is located farther from your new home, then hiring a property manager is a viable solution. If you prefer not to tackle the day-to-day tasks of managing a rental unit, then it’s also best to leave the management in the hands of professional property managers.
Legally, knowledgeable property managers who are well versed in
landlord-tenant laws can protect you. You are assured of steering away from probable lawsuits and hefty fines especially when you’re a first time landlord. Property managers also have built in systems paired with advanced technology that makes the rental business operation far efficient than managing it on your own.
Hire Advantage Realty Services for all your property management needs.
Bottom Line
Converting your home into a rental property requires assessment and thorough planning. You need to study and develop new landlord skills if you’re determined to do it on your own. You have to also be financially prepared as well.
Whether your new rental property is in
Carrollwood,
New Tampa or elsewhere,
Advantage Realty Services can help you!
Contact us today.
