Article Courtesy of Suzie Wilson:
Though the housing market is still seeing some action, many homeowners are opting to rent their homes rather than selling. By choosing to rent, you may be able to skip the stress and potential expense of managing a home sale during the coronavirus. Here are our top tips for becoming a landlord rather than selling your property.
Monitor Local Activity Before Deciding How to Proceed
Checking out the local housing market is a smart idea before you make any long-term decisions. Check real estate prices in your area, including how long properties hang on the market (homes in Richardson average around 34 days on the market). Then, investigate local rental rates and trends. To learn more about the real estate market in your area, you may want to consult a local realtor to get their assessment.
You might find a stark lack of available rentals—a common occurrence in many markets. But in some places, rental prices are decreasing as short-term rentals decline. Knowing what the going rate is for rent in comparable properties can indicate whether renting your home is a smart idea.
Set a Fair and Logical Rent Price
Putting your home up for rent might seem simple. You need to cover the mortgage, if applicable, but what else do you need to know about rental prices? Experts suggest calculating rental pricing based on your home’s value. However, market conditions can have a greater influence on fair housing rates than your home’s assessed value.
Check out comparable homes on rental listing sites in your area and consider the location, size, lease length, and market trends to settle on a reasonable price to charge for rent. Also factor in features like parking, landscaping, and any furnishings you’ll include.
Know Renter Rules and Rights Before Placing a Tenant
During the first week of April—mid-coronavirus—NPR reported that nearly one-third of renters didn’t make their rent. While this is frustrating for rental property owners, an emergency ban on evictions covers many people in the rental market.
Consider whether the anti-eviction law covers your property, and how you would cover costs if your newly placed tenant wasn’t able to pay rent. Renters’ rights extend beyond eviction procedures, too.
For example, tenants are entitled to a certain amount of privacy. And, even if you have a no-pets policy, a person with a seeing-eye dog or another service animal can still bring their animal when they move in.
Consider Hiring Professionals to Manage Your Rental
Becoming a landlord involves significant responsibility, and many homeowners would rather not handle the ins and outs of renting. But is it worth the cost to hire a property manager? The going rate is anywhere from four to 12 percent of your monthly rental rate, notes Money Crashers.
In exchange for the monthly fee, property managers find and place tenants, collect rent and deposits, and even orchestrate maintenance and repairs as necessary. Of course, these are important tasks, so you shouldn’t trust just anyone with the job.
Finding the right property manager involves getting referrals from within your network, interviewing the potential candidates, and negotiating a contract. You should also trust your gut when it comes to hiring someone to care for your home while you’re not around.
Carefully Screen Applicants Before Selecting a Tenant
Whether you’re doing it yourself or hiring a manager to fill a vacancy, carefully screening applicants is crucial. Legally, you may pull an applicant’s credit report, require a written application, investigate any past evictions or bankruptcy, and verify employment and income.
And while there are some questions you cannot ask—such as details on religious or familial status or background—asking the right questions is essential. Ask applicants why they’re moving, how long they have been in their current rental, what their income is, and how many people will be living in the home.
Be up-front about your rules, too—such as no pets—to help weed out unsuitable tenants before you spend too much time with them.
Delaying a home sale in favor of renting might be the right choice for you. Especially during the coronavirus pandemic, staying put could be better both financially and health-wise. And with the above tips, you can start renting out your h
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Thanks to Suzie Wilson for writing this article for Peer 2 Peer Real Estate.
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