5 Things You Must Know Before Turning Your Current Home Into a Rental
Whether you are turning your current home into a rental because you want to or because you have to, there are a few things you should know before you take the plunge and become a landlord.
Is it OK?
Before turning your home into a rental, you have to first make sure you are allowed to. If you live in a community with a homeowners association or covenants, for example, there may be prohibitions on someone other than the owner living in the home. If this is the case, you might want to consult with a lawyer to see if such restrictions are enforceable.
What are the local rental laws?
Before renting your house, you want to make sure you understand the rental laws for both your city and state. For example, are there any rules regarding how much of a deposit you can demand? Many cities also have limits on the number of tenants who can live in a rental. For example, it may be limited to one unrelated person per bedroom.
When you go from living in your home to renting it out, it will change how you need to insure it. Instead of your homeowners policy, you will need to get a landlord policy that covers the structure against damage from fire and weather. You may want to require your tenants to get rental insurance, especially if you are leaving any items in the home, such as furniture.
Who is going to take care of the house?
If you are simply moving to smaller house or apartment to save money and will live in the same community, you will probably be able to handle landlord duties yourself, although you might want to hire someone for maintenance issues. However, if you are moving out of town due to a job or family issue, you will need someone to take care of renting the property and maintaining it. You can often hire a real estate management firm that will take care of everything for a flat fee or percentage of the rent.
What are your future plans for the home?
If you plan for the rental to be short term, you may want to keep some of your things there. If that’s not possible, you can put them in a storage facility such as Storage Deluxe. If you plan to rent the home long term, keep in mind that it will change your tax situation.