When the time comes to move into a new home, many people aren’t sure what the most lucrative course of action it is to take up with their old property. One of the common choices is, of course, deciding to put it on the market and strive to get the sell it for the best price. There is, however, another option that you might want to look into.
Converting a home into a rental property can often be a choice made because other options are inconvenient at the time. But, even when you’re not in a hurry, you should consider doing so because, if you do it properly, it can actually turn into an extremely fruitful source of income.
Consider Your Insurance Options
One of the most essential steps is properly insuring the property that you decide to rent. You need to protect yourself from any liabilities that you might face. This is why you need landlord insurance. It may be higher than regular insurance, but it isn’t so without reason. After all, rental property is more susceptible to wearing and tearing.
Every landlord insurance that you take into consideration has to cover at least the damages done to structures, maintenance equipment, and any outbuildings. It should also cover smaller accidents that might happen on the property itself. However, if you are looking for more than that, you should check for insurance companies that also provide services such as taking care of legal fees or covering potential damages from floods and storms.
Boost the Appeal and Minimize Vacancy
Naturally, if you want to rent your home and do so for a reasonable price, you have to boost its appeal. The reason why this is so important is that you want to avoid long vacancy periods. Basically, vacancy is one of the worst things for rental property due to the simple fact that when it’s empty, it’s losing money instead of generating an income.
Still, if you do end up facing a downtime period, you should make the best of it. This is the time when you can make the place shine. Do a thorough sweep and fix everything that isn’t working properly, until the property shows no signs of the previous tenants. Furthermore, according to the advice from professionals, such as those at Konnect Building Solutions, this is the perfect time to look for home renovation experts and spruce the place up.
Determine Your Rates
Before you get any tenants, you have to decide how much you’re going to charge. The best course of action is to look into the competition. See how much other local rental properties are charging and come up with the best possible price accordingly.
Of course, the rent has to cover all of your costs as well as bring you some extra profit. The general rules state that you can charge from 0.8% to 1.0% of the home’s value. Find out the specifics related to your country and settle for the final figure.
Screen for Potential Tenants
The process of screening for tenants shouldn’t be taken lightly. There are no general rules that you can apply here, and you’ll often have to follow your gut. This, however, doesn’t mean picking anyone who simply makes an excellent first impression. Ask any questions that matter to you and be careful about people who might attempt to manipulate you.
Of course, your own preferences come into play as well. Some people like to have students stay at their rental properties while others trust people with families more. This is really up to you. Many see ideas such as young students being messy or female tenants being more conscientious as stereotypes. And while they can be, the chances are that they are spot on. Look into the experiences of other local landlords and decide for yourself what you should and shouldn’t take into account.
Whatever you decide, the best course of action is to have everyone fill out an application form.
A property manager can be an option
You can consider hiring a property manager. Because property managers deal with the pressure and craziness of managing a rental home. They collect rents, supervise maintenance, attract tenants and complete rental contracts. A good manager of a property can make rental income instant.
Once you’ve got everything in place, it is essential to remember to stay in the mindset of someone doing business. Getting acquainted and even friendly to an extent with your tenants is fine, as long as you don’t forget that you are investing time and money into this and expect a return that makes the whole endeavor worth it.
It may start rough, considering all the investments you need to make, but if you tread the waters carefully and don’t give up, property renting can truly pay off, and you’re going to be successful.
Mia Ackerson is a Melbourne-based writer. Loves writing about home decorations and home improvements. She’s also interested in reading books, movies, music, baking, and gardening. You can follow her on twitter.