If you are looking to earn a passive income or turn a liability into a huge asset, renting out your house might be a great option for you. There are many reasons you may consider renting your house. Perhaps you suddenly are notified of a work transfer or you're having a hard time selling your house. No matter your reasoning, renting your house is a smart way to build an investment for the future.
Of course, being a landlord isn't always easy. Chances are that you will experience a tenant who trashes your house or consistently pays rent late at some point. You can head off a lot of these problems by taking the right steps to rent out your house in the beginning. We’re not saying you’ll never have a nightmare tenant, but you will be a lot more likely to attract a good tenant if you go about renting your house the right way from the start.
5 Tips for Renting Your House
Tip #1: Advertise to attract great tenants.
The first step to renting your house is finding potential tenants. If you want a great tenant, make sure your advertisement is competitive. Upload pictures of the home that were taken in good lighting! This is very important: Many good tenants won't bother with ads that don't have pictures. In the copy of your ad, include key information such as the number of bedrooms and bathrooms, square footage, appliances included, and key features such as garage, yard, and pool.
Tip #2: Make sure your house looks great.
Your house should be in good repair, and it should be clean. If there are any upgrades that need to be made, go ahead and make them. Picky tenants will take better care of your house, and tenants who are okay with living somewhere trashy are likely to treat it accordingly.
Tip #3: Have a great rental application process.
You can prevent a lot of problems by having a great rental application that gives you a lot of information about the prospective tenant. You should always ask for references from previous landlords, proof of income, and permission to run a background and credit check. Follow up with the applicants' references and ask questions like: Did they paid rent on time? Did they cause any damage? Did they violate the lease agreement? If the previous landlord declines to provide any information, this is typically not a good sign.
Tip #4: Have a watertight lease agreement.
You may have a disagreement with one of your tenants at some point, so make sure that your lease agreement covers all contingencies. Don’t rely on handshake agreements or verbal promises – if you make any agreement with your tenant, put it in writing and get a signature. Read more about watertight lease agreements here.
Tip #5: Know who you’re renting to, but not too well.
It’s important to know who you are renting to, and your rental application should help you avoid any unpleasant surprises. But you shouldn’t know your tenants too well. Don’t rent to friends or family – it can cause major problems when you need to enforce terms of your rental agreement.