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5 things to do before renting your house

Renting out your property may seem like an easy way to increase your passive income, but when you start the process, it can be more complicated than expected. Your house can stay on the market for months without a rental applicant because it is priced above fair market rent. A bad tenant may be late or outright refuse to pay rent; they have the potential to do thousands of dollars in property damage and may ignore your attempts to evict them from the property until authorities get involved.

So how can you avoid the headache of these common pitfalls associated with renting a property? Here are five things you should do before you rent your home to reduce the risk and stress of being a new homeowner.

1. Take pictures of the property

Property photographs are necessary for several reasons. They are an important part of online advertising; Otherwise, potential renters overlook favorable rental listings without property pictures because they don’t want to have to wait for a home tour to discover that the property doesn’t have a layout or design that suits them. These photos will also come in handy when your future tenants move in, as you can use them to measure any property damage that occurred during the rental period.

2. Assess fair market rent

While it may be tempting to charge higher rent to recoup money from any recent renovations you may have done or moving costs when you left the property, the best thing to do is do some market research: check with rental websites. , newspapers, local owners. , real estate agents and property management companies to determine the amount for which properties of similar location, size and condition are rented.

3. Create a concise and effective rental application

An effective rental application will not intimidate prospective tenants with its length, but it will be comprehensive enough that it can be used for tenant screening purposes. Any additional information you need from the tenant in the event they pass the screening can be included in the lease documents. A good app will have spaces for the following elements:

  • Name

  • Date of Birth

  • Social Security number

  • Phone number

  • Current/previous addresses (last 7 years, including owner names and contact information)

  • Current employer (name, address, date of hire, income, contact information)

  • Authorization to Obtain Consumer Report Statement

  • Tenant Signature

4. Consider using a property manager

Property managers typically charge a percentage of the monthly rent for their services, but in return, they will handle things like finding new tenants, creating/signing leases, collecting rent, and issuing legal notices (including evictions). Hiring a property manager reduces the profit you’ll make on your tenants’ rent payments, so you should carefully consider the cost-benefit of these services.

5. Find good tenants

Finding a decent tenant is easier said than done: many applicants may be nice, polite, and will seem like a good fit, but they will create an avalanche of problems for you. The best way to improve the quality of the tenants you are renting to is to conduct tenant background checks, that is, choosing tenants based on measurable rental and fiscal responsibility. Most landlords will charge rental applicants an application fee to cover the cost of tenant screening.

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