If you own a home that you can rent out, it’s a great way to earn some extra income or an extra way to start saving money. Single-family home rentals are booming in the United States and demand is continually increasing as more people are choosing to rent rather than own due to it being more affordable and flexible. Renting out your home is a great opportunity and something to consider if you can afford it.
Here are five things to know if you’re renting out your home.
1. Start an emergency fund – One of the first things to do if you are renting is to start some type of emergency fund. This will be huge in the future if you ever need to do any major repairs or damage. This is also helpful if you are in the position where your current tenant cannot pay the rent and must pay the mortgage. This will also help in any extended vacancy of your home or in case of disasters like basement flooding. An emergency fund is key to making sure you’ll be able to handle renting for the long term.
2. How you will manage your property: This is totally up to you, whether you want to manage the property or have a friend, family member or hire an outside person that the tenant can communicate with 24/7 week if any problem arises. up. These include regular repairs and maintenance even for a pipe that bursts in the middle of the night. It’s important to lay down the ground rules early on and decide which route you’ll take.
3. What will your tenants keep? This goes along with #2 on our list. Be sure to clearly mark what your tenant will be responsible for in the lease, such as lawn maintenance or minor repairs. It’s entirely up to you, although usually simple tasks like keeping the house clean should be left to the tenant, the rest is up to you.
4. How to find reliable tenants: This is important to make your life easier and to get a reliable person in your rental house. Post an ad on Facebook or Craigslist or find a family friend, which is usually the best case scenario. Always be sure to run a background check, credit report, eviction report, income verification, and your rental history. There are many things you can and should look for, you want to make sure the person is trustworthy and someone you can trust to live in your home.
5. What Your Insurance Policy Covers – You should get some type of homeowner’s insurance policy that will give you adequate protection. The protection you get is similar to what you’ll get with a comprehensive homeowners insurance policy, but it generally doesn’t cover belongings inside the home. That’s where a good renters insurance policy comes into play. Recommend to your new tenant that a renters insurance policy is the best way to protect them and their belongings where you cannot.
Renting out your home can often seem like an uphill battle, but once you get the hang of the system and a good tenant, it’s easy and a great way to earn a second income and save some money.