You don’t necessarily want to sell but you don’t want to live there anymore. Maybe it’s time to rent out your existing home. If you’re considering turning your primary residence into a rental property here are 10 tips from the experts.
#1. Make sure you have the right mortgage for rental.
If you’ve been living in the home for quite a while you may need to convert your mortgage to an investment mortgage. The rates may be a little higher but you’re covered for other options. Inform your mortgage lender that you are turning this property into an investment and if they have better deals or different mortgage you could go with.
#2. Fix everything up before tenants move in.
Chances are if you don’t fix it now you will be called upon within the next coming weeks to get things fixed, repaired, or replaced. Do them now so you won’t have to hear from your tenants for a while.
#3. Don’t worry so much on bathroom and kitchen remodels.
It’s important to update some appliances but you don’t have to put a ton of money into updating kitchens and bathrooms, which is the most expensive rooms to update. If appliances and items are over 50 years old then take the time to do the update but if things are just 20 years old, you are better off leaving it alone.
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#4. Replace the carpet if it’s over seven years old.
Putting in durable flooring such as Pergo Outlast® will be a better option than carpet when it comes to kids, pets, and renters just putting wear and tear on the floor.
#5. Talk to your insurance company.
Your homeowner’s insurance company needs to know that you are turning the property into a rental and they may charge you more. It’s not a lot more, but you will be covered if something goes wrong under attendance control.
#6. Check with your homeowner association regulations.
If you are in an association there may be limits on how many homes can be rented out within that community.
Related: Owning Someone Else’s Home Can Make You Rich
#7. Avoid unoccupied months.
Obviously, a lost month of income is a lost month of income. So if you know that your property is going to be vacant start advertising for new tenants earlier than you think you might.
#8. Price it at market value or lower.
If you are holding out for an extra $100 per month it may not be worth missing months of rental payments. Lower your pride and mark it to rent.
#9. Consider exterior maintenance costs.
Some renters and tenants love to maintain their own yard but many won’t. So, you’ll need to spell this out in the lease and if you find a tenant that will take care of the property the way you would, that’s money in the bank.
Read More: 8 Keys to Finding the Perfect Property Manager
#10. Document the move-in day.
On the day a new renter moves then make sure you photograph everything in the house and keep a record of a prior condition. This protects the renter and you.
#11. Use a professional lease agreement.
Document everything, make sure the rules are extremely clear about pets, smoking, maintenance, etc. Use a professional lease agreement that covers everything and if necessary, use a property manager or real estate attorney to look over everything to protect you and the renter.
#12. Keep separate bank accounts.
It’s important to have separate bank accounts for personal income and rental income. You don’t want to co-mingle the funds.
If you are considering renting out your property or looking for a specific rental property around the Tri-Valley area please give me a call. I specialize in helping homebuyers and sellers with rental and tenant investments and can offer advice, potential properties, and answers to any of your questions.
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