There are many reasons to consider turning your home into a rental property. You may have an apartment you own where you can live while collecting rent as a second income. Maybe you’re moving into a new home and do not want to sell your old house. Perhaps you are moving abroad but do not want your house to be neglected.
Whatever the reason may be, there are many advantages to renting out your home. Check with your home mortgage lender to make sure you meet the requirements for renting out. Some mortgage lenders require you to live in the house for a certain amount of time or meet a specific percentage of payments before renting out. A reasonable mortgage lender will be able to work with you to find the best solution that works for both of you. ;
Does Your HOA allow renters?
If your housing area has a homeowners’ association, you may want to find out the rules they have regarding renting out the property. Some HOA’s have stringent guidelines outlining the kind of renters you can allow in your home.
If you do not have an HOA, then count yourself lucky, as this will reduce a great deal of the headache you may face in getting permission.
Get New Property Insurance
Even though the property remains in your name, your homeowner’s insurance will no longer apply once you rent out the house. Homeowners insurance is for people who are currently living in the property, and your insurance agency is unlikely to allow you to extend the coverage to renters.
A comprehensive property coverage plan that protects in the event of damage or loss is a much better idea. It will keep you from having to lose money in the event a renter misrepresents themselves and turns out to be a bad housekeeper. Find a property insurer that gives liability coverage and unscrupulous renters who have been known to sue homeowners for accidents they suffer while in the home.
You Are the Best Landlord
Because you have lived in the home, you can anticipate the issues a renter may face. You can be honest with them about what to expect and the solutions you have used that have worked for you.
If not, then you know how to fix the issue when they report it to you. Unlike renting out a new property, renting a home, you live in allows reassures you that you have the experience to address issues. A new property will have issues you are not familiar with and may have repairs that you cannot financially bear. This will only cause misery to both you and your renter.
Hire an Attorney for the Lease
This is your home; even if you live elsewhere, you will be strongly attached to your home. Therefore, it is in your home’s best interest to have a lawyer draw up the lease agreement for the house. This will ensure that no one can take advantage of you while keeping you safe from the cost of repair if any heavy damage is done to your house.
Attorney fees may be high, but having a lease that does not hold up in a court of law may cost you more in the long term. Work with the same lawyer you hired when buying your home as they will be well-suited to advise you on the property laws that apply to you as a homeowner turned landlord.
How Do You Want to Rent It?
Homeowners now have more options when it comes to renting out their homes. You can turn your home into student housing, which will allow you to collect rent per room, you can lease the whole property to a family, or you can turn the home into an Airbnb and rent based on need.
Whichever route you choose, make sure to research its advantages and disadvantages before making a plan. The financial benefits of these different types differ, and you must choose the one that suits your needs best. If you want it as a second source of income, you should find a renter willing to agree to a long-term lease agreement. ;
Always do due diligence and look into the backgrounds of your potential renters. You do not want to rent your home to people who will disrespect the love and effort you have taken in treating it well. Ask for references, and be wary of the renters who make excuses not to give you references. Have a list of requirements, such as no pets or hammering, and discuss them with potential renters.
Protecting your home is protecting yourself and a source of income that you need to have. Make sure that your home is in good shape as well. Use the time you have remaining in the house to clean it well, paint where needed, and make repairs to ensure that it is in the best shape it can be. Giving your renters a beautiful home is the best way to make sure that they treat it with love.