If you’re looking to go out of station for a long period of time then you must be thinking that renting out your home would be a good idea. In fact, it is, until the tenant, you rented in your home thrashes it inside out and when you come back you have no other option than to repair the house completely yourself.
Renting out a home or a property can lead to a plenty of annoyances, but there may also be a plenty of positive outcomes of renting a home that you could consider. Renting a home can increase your cash flow, give you certain tax benefits, and can even give you the flexibility of selling the home whenever you want.
However, to enjoy the positives, you must make sure that you mitigate all the risks involved in renting the house. Generally, mitigation risk means having a plan. It’s recommended that you save yourself from the trouble by understanding the pitfalls and converting your home into a rental property. Here are some of the things that you should know before renting out your home:
Know the costs
Before deciding to rent out your home, you should always look for the rental rates in your area to know that whether listing your property is worth the effort or not. You can do this by looking out for the available properties and at what price they are rented for, or you can also hire a property manager with some proven experience who can help you decide the perfect cost of the rent for your property.
Know the tenants
If you’re thinking of renting your property to friends and family then it’s not mandatory as chances are you know them very well, but if you’re thinking of getting a stranger rent your property you must make sure that he/she is eligible for it. You need to know the background of the tenant before handing him/her the keys to your home. For that, you may check their criminal reports, rental histories, and other stuff.
Also, remember to check their credit scores. Checking credit report is important because it will provide you a clear idea about how often does the tenant pay his/her bills and mortgages, and you will be sure that your rent will be paid on time without fail.
Know the law
Different countries and states have different rules and laws related to property renting. This is why it’s recommended that before renting out your home, you should consult a good public accountant and search for all the tax codes associated to rental properties. You should also research about the federal, state, and local housing laws to make sure that you aren’t breaking any rules.
Make sure that you mention all the rules and regulations in a rental agreement that you would provide to your tenant to make sure that they know their rights. In addition to all these also be ready for repairs and maintenance as failing to do so can get you into legal trouble.