Tips for Picking Out the Best Tenants for Your Home Propertyby Rayanne M. Writer
Whether you're planning to rent out a section of your home or the whole place, you'll want to make sure that your tenants are safe and responsible. You'll also need to make sure both you and your tenant are legally protected from fraud and theft. There are many important parts that go into finding the right tenant for your property. Keep reading to learn about more.
Legwork: Get the Place Ready
Are you moving out completely, or will your tenant be living with access to some of your possessions? Invest in a storage locker off-site for precious objects and personal items. Leave nothing in the house of sentimental value or that you can't easily replace. Thoroughly clean the entire space from top to bottom. Empty out cupboards and the refrigerator, unless you plan to leave some hostess friendly treats, such as good coffee and fresh bagels for the first morning. If the tenant will be using your furniture, invest in a waterproof mattress cover and multiple mattress pads. Get coverings for the sofa and armchairs. Hire a cleaning lady to visit the house twice a month to keep things tidy, and give her license to let you know of anything odd or destructive.
Line up a handyman as well. Because you're likely going to be out of range for repairs or concerns, give the tenants the phone number for your handyman and make that person the first point of contact for any repairs or worries. Again, give this person license to let you know of anything odd. Finally, consider investing in door cameras. You will want to know of any break-ins, for the safety of your tenant and your property. You'll also want to know if they've done something inappropriate, such as bringing in a roommate who's not on the lease.
Groundwork: Get the Right Person
Set up an application process that requires a small fee to weed out those only marginally interested. Use this fee to run a tenant criminal background check, and run a credit check. Also make the effort to call old landlords and roommate references. Ask important questions. Would you rent to this person again? People with a history of poor payment can correct that history when their situation gets better, but people who tear up property tend to always be destructive. Make sure you discuss with your potential tenants factors such as pets and guests. If your new tenant has a dog that's well trained, you might want to ask for an additional deposit. If they have 6 cats and a bad history, find a new tenant.
Bookwork: Insurance, Income Taxes, and Managing the Money
If your tenant is paying enough to cover your mortgage and put a little in your pocket, excellent! You're well on your way to a bit of freedom. However, you'll want to put enough in your bank account to cover a couple of mortgage payments if things go south. Make sure you take a look at your insurance policy to confirm that this rental decision is covered. If you don't see anything on your rental options, talk to your insurance agent about adding a rider or upping your policy. Yes, it may be more money, but if your house burns down because the tenant flipped the grill over, it will be nice to know you're covered. Carefully note with your tenant what will be covered by your insurance. For example, their safety and well-being may be covered, but not their possessions.
Talk to your tax professional about the steps you need to take to treat the income you get from your rental. You may need to set up your own company if you plan to do the rental thing a lot, or you may need to pay quarterly taxes to avoid penalties. You might also be able to simply up the withholdings from your W-2 job to reduce the impact of your rental income.
No matter how long you plan to be gone, a good tenant can act as a caretaker for your property. They will make the place look occupied and reduce the risk of theft or squatters taking over your property. Consider putting a coded lock on the door to avoid having to hand out too many keys. Make sure they have your contact information to reduce the risk of miscommunication.
Created on Aug 19th 2020 15:44. Viewed 144 times.