1. Decide what amount you will rent for, ahead of time
The best way to know how much a property should rent for is to just check online sources to find out the average price in that area. You want to be realistic about how much you charge, even if the rent is lower than the mortgage payment. This is because if your rent isn’t comparable to others in the area, you won’t lease the property out.
2. Find the right tenants
There are many ways you can find tenants, the first step being to advertise your listing. Ask them to fill out an application that includes their name, contact information, salary and employment, previous landlords, but also references.
Additionally, you’ll want their Social Security number and an authorization for credit reports and criminal history. You can check credit via the three credit reporting agencies: Experian, Equifax, and TransUnion. You can check the criminal history through your local records or an online agency.
3. Always have a written lease
Written leases are vital because they help both parties to understand what their obligations are and their rights. Your lease needs to comply with fair housing, rental and tenant laws in your area, but also, insurance laws. You will have to check with your state, county and even city to find out exactly what those are, so it’s a good idea to have a real estate attorney.
4. Property insurance is key
Having the right insurance policy for your property is really important. You won’t be able to use the same insurance policy that you would if you were using it as your own home. When you live in a property, your insurance is a homeowners’ policy but when you’re renting, things change. Rental property insurance covers the structure, legal cost, medical expenses and loss of rental income in the event of a problem. As to your tenants, it’s a good idea to encourage them to purchase renter’s insurance to protect their belongings in the home.
5. Prepare for evictions and other problems
No one wants to evict a tenant but unfortunately, sometimes this happens. First, be sure that you have something written in the lease that outlines your process as it complies with local laws. Also, have an attorney you can trust to help you with any legal issues you may face. In the eviction process, you will have to go to court, and those legal fees can add up quickly.