Renting Your Home Out for the Summer
Many people dabble in property management and tenant leasing each year. Snowbirds want to spend time up north, while Arizona sizzles in 115+ degrees. Others want to take that extended vacation in Italy or Brazil, but need to cut back on bills back at home, in order to do so. Still, others receive rare opportunities that must be capitalized on, like internships in exotic, cultural and empowering cities. Again, they want to keep their property back at home, but need someone to cover the mortgage while they are away. This industry has progressed and evolved quite a bit over the years. Because of that, now is a better time than ever to proceed with such an endeavor. There are just a few key items to consider.
Study Up on State/County/HOA Regulations
It’s crucial that you do your homework, in regards to the laws that govern where you live. Many cities have strict regulations about rental properties, as do HOAs. Learn about these before you jump the gun. It may be wise to talk to your local government officials (i.e. a town hall meeting) to find out the dos and don’ts of renting out your home. You can also consult with an attorney that deals in property management.
Consult Your Accountant
Beware that your taxes will increase with renting out your property. The taxes will depend on whether or not you’re renting out your basement and still living at the property, or if you are living elsewhere, while tenants reside in your home. Put money aside for said taxes, so that there are no surprises come April 15th.
Research for Competitive Pricing
Learn about the market value of homes in your area. You can research the MLS, consult county records, or retain a broker/realtor to help you know the fair value. You can also get your property appraised so that you have a true idea of the value.
Check Out Your Tenants
Be smart about who you lend your property to. Background checks are worth every penny, because you can see past creditors, as well as criminal backgrounds. Don’t invite strangers into your homes. Get the facts, ask for references, and even set up interviews with the families, before you commit to renting out your home. This could be the difference between whether or not the renters damage your home.
Make a Contract
There are examples of many contracts online. Maybe ask around to friends or family who has rented out properties before and ask them how they have written their contracts as well. Write down a list of the things that are important to you and what your expectations are. Then, you can take those criteria to an attorney to help you complete the contract. While it may initially cost you money out of your pocket, it could mitigate great risk and loss. What you pay out the first year for the legal fees will be made up over time, as you protect yourself with a sound contract, as well as legally bind your tenants.
Remember that while you get to collect the rent check, you also have to cover repairs now. Before renting out your home, do a comprehensive inspection. Find out what needs to be fixed before bringing in tenants. If the home is not finished, see what you can do to further that process along. Perhaps, that means that you finish the basement yourself, or maybe you hire that out. Think about the experience you would want to have if you were in the renters’ shoes. Decide that you are going to be a great landlord. Once you begin renting out your property, you will be required to make repairs as they come up. Be prepared to do so and have a reserve for such. Create an annual schedule for proper upkeep—a spring checklist of sorts.
Renting your home out for the summer can be a great experience. If you prepare properly, you can have peace of mind through this entire process. Know the legal regulations of your geographic location, consult a tax specialist, know the market value of your property and what other property owners are charging, conduct thorough background checks, write a sound contract, and keep up with the maintenance. Yes, setting everything up will require some time and maybe even upfront cost; however, it will be worth it in the long run and has great potential to be lucrative.