Renting Out Your House: Top 4 Things To Consider

At some point in your life, you may decide to rent out your home. Commonly, you’re moving out of your current home into a new one. Maybe you’re downsizing, or perhaps you’re just moving to a new location. Either way, you have decided to keep your old property instead of selling it. 

A pretty smart decision, given that you can earn money every month from renting your home out. However, before you jump into things and rush to get started, you need to consider these crucial things: 

How much should you charge for rent?

This will depend on different elements, but the main two factors are your home itself, and the location of the property. In fact, the location is pretty much the key defining factor here – you need to set a rental rate that aligns with the other properties in this area. 

The size of your home obviously also comes into play, as does the way it looks and how nice it is. For example, if you have a one-bedroom home for rent right next to a three-bedroom home, the one with more rooms is clearly going to cost more. Likewise, if your home is fairly new, it could command a higher rental price than older properties – especially if you have loads of new appliances and modern interior design features. 

A good way to know how much rent to charge is by looking at the current rental property market. You could also consult with property experts to see how they value your home in terms of monthly rent. It’s very important to consider all of this because it stops you from over or underpricing your property – both of which are problematic for different reasons. An overpriced rental property won’t attract tenants, so you won’t make money. An underpriced one will attract tenants, but you won’t earn as much cash as you could/should. 

If you’re struggling to work out the perfect equilibrium on your own, you could also consider contacting property experts in your local area, whether this is a real estate agent or a lettings agent. They’ll have more experience in dealing with property prices and be able to give you a rough estimate on the market rate for a property of your size. The other option would be to contact a Property Management company and work out a deal with them to manage the property for you. This can be a great option if you want to free up your time for other endeavours at the cost of a commission fee each month. Property management experts can deal with setting a rental price, finding and referencing tenants and handling any queries during the tenancy, so this can be a great option if you’re unfamiliar with the whole process.

What makes a good tenant?

Something that a lot of homeowners tend to forget about when renting out their properties is what makes a good tenant? It’s so easy to assume that anybody paying rent will be a good tenant. Hey, as long as your house is occupied and you’re getting money, what’s the problem? Well, the problem can be pretty substantial if you pick the wrong tenants. Bad tenants have a tendency to do things that can cost you a lot of money and time. For example, they don’t pay rent on time each month. They constantly have issues, giving you no money or half the rent and failing to pay you back by the time they said they would. It leaves you with money unpaid, which can be super frustrating. If you have issues with payments and this continues to happen, you can report late rent payments to credit bureau which may affect tenants credit score and their ability to rent in the future.

Moreover, tenants can still be bad even if they pay on time. For instance, what if they make a complete mess of your home? They don’t look after it, there are stains everywhere, they rarely clean up after themselves, etc. You may not live there, but you still need the home to be in excellent condition. After all, it’s your property, so you’re responsible for things like general repairs and maintenance. If a tenant makes life difficult for you by not maintaining the property, you have to splash the cash on cleanup crews and maintenance contractors – it all adds up. 

Ideally, the perfect tenant will pay rent every month with no issues and keep your home in perfect condition. Finding ideal tenants may seem difficult, but this is where letting agencies such as https://www.hybr.co.uk/ can really come in useful. They will find and screen potential occupants (in this case, students at local universities) and determine whether they can be trusted with the lease. This can save you a great deal of trouble later on!

How do you find good tenants?

Knowing what makes a good tenant is only half of the battle. You also need to know how to find them! For someone that’s renting out their first property, this can be challenging. You need to be able to advertise your property, so you can be put in contact with willing tenants. At the same time, there should also be a vetting process to help you filter through tenants and remove the unsuitable ones. 

How do you vet tenants? There are a few very simple things you can do to see if someone is suitable or not: 

• Ask for proof of income – this lets you know they have a job and are getting paid regularly

• Run a criminal record check – this lets you see if they’ve been hiding something about their past. Let’s say the check comes back with multiple arrests for stealing, you kind of don’t want that person staying in your home!

• Ask for references – a very easy way to see how they are as a tenant if they have rented before. You should contact former landlords to see if they recommend this tenant. If not, why?

These three checks instantly help you figure out if someone can be trusted or not. You learn if they’re financially capable of living on your property, and you also learn if they have a good track record or not. It should help you get a list of good tenants, so you can avoid letting a bad one rent your home. 

How will you manage your property?

You no longer live there, but you still need to manage the property. This means scheduling regular maintenance as required, dealing with any tenant concerns, and so on. Some landlords do this themselves, but you may want to consider working with property managers. 

Property managers are useful if you don’t live close to your rental property. As such, you can trust people to take care of things while you enjoy your life in a new location. Before hiring anyone, consult a checklist for property managers to ensure you are getting all the necessary services. Good ones should help advertise your property, deal with maintenance, handle tenant queries, collect rent, and even vet tenants beforehand if you ask them to. 

After you have considered these key questions, you will be ready to put your home on the rental market. This will put you in the best possible position to get as much money from your property as you can, while also avoiding any nasty tenants that trash your home and don’t pay rent.