Renting out your home or condo can be a way of making a little extra money. Whether it is renting your home for a few weeks while you are on vacation or a longer term rental, it is important to take the right approach to protect one of the largest investments you have, your home. There can be a lot of work preparing and renting out your home. The benefits include generating extra income and meeting people from different walks of life.
Investors planning on renting out a condo like the development by Pinnacle International to short or long term tenants typically follow the steps covered in the following outline.
Getting Ready to Rent
The first step is to assess if your home is actually rentable. Are you in a good location, near attractions and do you have the features that make it interesting to potential renters.
Are There any Legal Issues
Such as city and county or state laws to abide by. Does your mortgage allow you to rent out your home and does your condo or HOA have any restrictions that would prevent you from renting out your home?
Term of Rental
How long will you rent your home and are there any local restrictions? In some locations you cannot rent your home for less than 30 days, while others allow it but charge a city tax for renters who stay less than a month.
Entire Home or Just a Room
Is a key question to answer with many different outcomes. A single room may mean more interaction with guests than you want. Renting a portion of the home with a separate entrance will provide more privacy and less interaction. Renting the entire home potentially exposes the home to more wear and tear.
Since all income is taxable, be prepared to keep accurate records of all income and expenses to minimize the tax payable at the end of the year.
Do you need permits in your area? If so, get them well in advance and arrange all inspections and notices that might be required. Keep track of permit fees. These can be deducted against your income.
Your current homeowner’s insurance does not cover any type of rental situation. Make sure you have the coverage to protect your investment as well as your guests.
Is Your Home Ready for Your Guests
Prepare an inspection report that can be used each time you have a new tenant. Everything should be clean and in working order. This includes smoke detectors, fire extinguishers, carbon monoxide detectors, provide clean toiletries and all linens, ensure all appliances are in working order and any special items you provide. Remove all personal items and items left by previous guests.
Cleaning and Landscaping
Hire a cleaning service if you are unable or do not want to do your own cleaning and landscape work. Many people prefer to hire professionals for this purpose.
Providing an Entry System for Your Guests
That avoids having to mail keys or collect keys from them. Keyless locks have become very popular allowing the code to be easily changed after each guest has departed. Most allow remote changes. Make sure your guests have the entry instructions before they arrive to avoid frustration for both of you.
Welcome and Information Book
An information book covering everything your guests need to know about your home, rules to adhere by as well as local attractions, transportation and restaurants is a great idea. Some homeowners even provide small gifts such as bottle of wine, chocolate or fruit.
Advertising Your Rental
Take the time to prepare well written descriptions of the space for rent. Include quality photos of the home, the room or rooms and the neighborhood to provide your potential guests with an accurate and positive idea of what to expect when they rent your home. Use various online forums to advertise.
Rental Agreements or Contracts
Protect both parties and spell out the agreement that each party will adhere to. It should include the rent to be paid, duration, number of occupants, smoking restrictions, etc.
Such as Airbnb provide pre-screening services of landlords and tenants, agreements, insurance and rent collection all for a small fee. They also help potential clients find your home online and initiate a rental of your home.
Of your guests whether it is done by you or an agency will help to avoid any unpleasant situations. Ask for references, deposits, and confirm how many people will be staying in your home.
While it can be additional work for the home owner, renting your home can be rewarding in terms of added income as well as meeting new people. Follow the steps in a business like manner to avoid issues and problems which could cost you more than you make. Use partners to help advertise, screen and manage rental collection. The small fee they charge can make your experience very positive.
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