Renting your property can be a great way to wait out a struggling market. While this can buy you time until your home’s value increases, it can come with some additional responsibilities. It’s true wearing the landlord hat may not always be easy, but it doesn’t have to be intimidating. Explore a few of these tips to help you succeed at turning your home into a long-term rental.
Weigh the Pros and Cons
Roger Plevin has helped homeowners make important decisions by examining the results that matter most to them. For many, the pros of long-term rentals (like signing stable and reliable tenants and receiving a consistent income) overcome the potential drawbacks (like tenant turnover and the time-consuming and costly process of eviction). Right now, with the global pandemic impacting both the housing and the rental markets, knowing these pros and cons is crucial for your decision making.
Know Your Rights and Responsibilities
When you decide to turn your home into a rental property, there are quite a few legal boxes to check. First, update your homeowner’s insurance policy to include rental coverage. And since there will be gaps, also consider landlord insurance, to cover both liability and property damage. Second, contact a lawyer to find out if your city or county requires an inspection to ensure your home is up to safety standards.
Set Up a Rental Business
Monthly rent is one of the most important financial aspects of being a landlord, but it is not the only one by far. Calculate how much rent to charge that will cover all of your costs mortgage, taxes, insurance, utilities while also letting you build a nest egg for maintenance and upkeep.
Forming a limited liability company can protect your personal and professional assets, while also getting you access to special tax breaks, small business loans, and business lines of credit. These can help you cover costs, like conducting background and credit checks on tenants or hiring a property manager and contacting referrals. LLC regulations vary from state to state, so be sure to look into Florida’s specifics.
Make Essential Home Repairs
Fix any major and minor issues with your home before you can approve your first tenant. If the rental market is flooded, we recommend making some simple DIY upgrades to boost your home’s appeal. You’ll want to recoup what you spend with the rent you charge, so before you conduct a complete kitchen overhaul, consider starting simple, like installing a modern faucet and applying a fresh coat of paint.
Prepare Lease Agreements
Your lease agreement is the landlord-tenant arc of the covenant the most sacred document in your legal relationship. As a landlord, be sure all the terms of the rental situation are outlined on paper and signed. Make sure your lease agreement outlines the length of the lease, security deposit, due dates, penalties for late or missed payments, and a breakdown of all responsibilities (e.g., repairs, lawn care, pest control, etc.). Be very clear on policies about pets, painting, noise levels, and homeowner’s association dues, as well as rules on smoking and the like. In the era of COVID-19, with employment challenges around every corner, be sure to know all Florida and federal regulations for eviction policies.
Hire a Property Manager
An experienced property manager can take the burden of managing the home and its tenants off your shoulders. Hire someone who will make sure your home stays in good condition, while also attending to your renters’ needs. A professional property manager can be your ticket to hanging on to your home until the time is right and most beneficial to sell, as well as turning a profit in the interim.
Renting is both a common and even profitable way to keep up with multiple properties without breaking the bank. Roger Plevin has helped Florida homeowners choose this direction and sell when their home’s value increases or the market turns in their favor. If you are looking for creative realty solutions, contact Roger at 561-707-7960 to learn more about your options.
