How to be a Responsible Landlord: Five Things to Consider When Renting Out Your Home

So, you’ve just had baby number three and realize your two bedroom house is feeling a little too small. Or, maybe your last child just flew the coop and your house is starting to have an echo. Maybe you just want a change. Unfortunately, you still have ten years left on that twenty year mortgage. What do you do? Why not try renting?

Here are a few things to consider when renting out your home:

Local rental rates

Research, research, research! The best way to gauge how much you should charge for rent is to look at what others around you are charging. Much like you don’t want to undercharge for rent, you don’t want to over charge for rent, as it’ll make finding a renter even more difficult. Consider what amenities you’ll have as well as what updates you’ve made to your home. Those things will impact how much you should charge. Additionally, consider what you pay for a monthly mortgage. In most case, you’ll want to at least break even.

Consult a realtor

It’s never a bad idea to get help, especially if it’s something you haven’t had much experience with. Most realtors have had to go through intensive training which means they’re incredibly knowledgeable on all things property, owning, and rental related. If you’re unsure, it never hurts to ask a professional.

Look into the law

Before you consider renting out your home, research the property laws for your area. Check into the guidelines of state, township, and local laws as they pertain to subletting your home. Also, talk to a lawyer about proper documentation for renting. Most importantly, have a hard copy of your lease made up. You can get into trouble with a verbal agreement. Make sure you have all of your bases covered.

Know whom your renting to

As they say, living with your best friend is oftentimes the worst idea. Renting out your home to a close friend or family member can be just as terrible. We tend to overlook things when it comes to those we love; however, even if you’re no longer living in it, the home is still your responsibility and you’re still a landlord to your tenant. If you’re not able to remain unbiased, it might be best to go with an impartial party. In opposition, look into an applicant and don’t choose blindly. Background checks and credits scores are something you should invest in as they are a great indicator as to how responsible someone is.

Get insurance

Above all else, make sure you have homeowners insurance. Again, the property is still your responsibility and if it burns down or something terrible happens, that burden is still yours to carry. Make sure you have that fall back plan in case the worst should happen. It’s also a good idea to require the renter have renter’s insurance so that if they are the responsible party, their insurance will cover most if not all of their personal belongings.

If you want to make a change or your family just needs a little more personal space, you can make it happen. Finding a new home doesn’t mean a double mortgage, it means finding a way to supplement your new mortgage. Renting your old home is a great way to do that. Just make sure to do your research, know who you’re renting to, and play it safe by getting insurance. Your new home is waiting.