How to Convert Your Home into a Rental Property

If you’re planning to move somewhere, the first thought that strikes you may be selling your current home. However, selling your home when the market is in a downturn can leave you at a disadvantage.

Property owners who want to wait until market conditions improve can decide to rent out their vacated home. A rental property generates a monthly income that can add to your finances until the economy is rising again.

When you pressure yourself into selling your unit right away, the bidding price may be lower than your expectation. To avoid this, consider renting out your property.

A lot of benefits are available to rental owners such as:

• Enjoying a consistent passive income. The monthly proceeds can be utilized to add more amenities to attract more renters. You can also use it to pay for a mortgage for your new property.
• Gaining more from the property appreciation over time. Selling your home in the future can lead to higher profits owing to the unit’s rise in value.
• Filing additional tax deductions. Rental expenses reduce your tax.

If this sounds like an excellent opportunity, then you can try these tips to convert your former home into a rental place:

Research a Landlords Responsibilities

The responsibilities of a landlord can run in multiple directions. They’re faced with marketing and tenant screening duties when their rental is vacant. Periodically, they must also keep up with the maintenance of their unit and arrange repairs when property damage occurs.

Aside from that, landlords are also tasked to collect the monthly rent and perform property inspections to ensure that the tenants remain compliant to the leasing agreement.

Since this is a time-consuming affair, some landlords elect to hire a property management company. They pay a certain fee every month but in return they can focus their time in growing their portfolio and looking for more investment opportunities.

Finance the Property

Moving out means that you need to transfer to a new home. Check if you can apply for another mortgage. Some lenders may give their approval upon learning that you’re earning income from a rental property.

Keep in mind that this remains at the discretion of the lender. Your mortgage application may also be turned down. It’s best to communicate with the lender before converting your home into a rental place.

Apply for a Landlord Insurance Policy

Opening your home to renters requires having a landlord’s insurance. Your homeowner’s insurance will be insufficient to protect your property from the common damages that rental homes are subjected to.

Note that rental units inhabited by tenants are also more vulnerable to wear and tear. So, landlord insurance is much more suitable to purchase as coverage as it provides a safeguard for the following:

• Property structural damages
• Legal charges during a lawsuit
• Maintenance equipment
• Damage on exterior amenities such as pools and garden sheds
• Rent loss borne from property damage that make your property uninhabitable
• Damage resulting from natural causes such as lightning, hail and more

Schedule a Thorough Property Inspection

To ensure that your property is fit to live in and have no issues, it’s wise to hire a home inspector. This lets you know if there are repairs that need to be attended to. It also reduces tenant complaints and makes you aware of the problems your rental is potentially facing.

Most housing damages are ascribed to plumbing, foundation issues, mold and pest infestation. Dealing with the issues right away removes the stress of more costly repairs owing to serious property damage. Aim to provide a safe and livable environment for your renters.

Stage Your Property

Transform your residential home into an attractive rental property. This will inspire more prospects to book a property showing.

You should start this process by attending to your curb appeal. Next, renovate any areas and replace any appliances that may drag down your value. You can also hire a professional cleaning team to make your rental space spotless.

Optimize Your Rental Price

Determining the right rent can be done through market research. You can do a comparative analysis using online resources. Check for similar rentals in the same neighborhood to gauge the current price range in the market.

Setting the right rent rate is critical but this can prove a challenge for new landlords. In this case you can get in touch with a property management company like ourselves at McKenna & Vane Property Management, to help you come up with the proper rental price for your unit.

Craft a Solid Lease Agreement

You should look to craft a leasing agreement that outlines the reasonable terms and conditions for tenants to comply. Having policies clarifies expectations and lets the occupants know the limits in terms of having a pet, letting guests stay and attending to property maintenance.

Be specific with the rules and consequences so your renters are properly guided. A good lease reduces tenant conflicts and leads to a harmonious environment.

Bottom line

Turning your residential home into a rental property is a great strategy if you’re not ready to sell it right now. The extra income that it generates is rewarding. But being a landlord comes with its own set of responsibilities.

If time is a concern, then you can hire an outstanding property management team to perform the landlord duties for you. Long-distance landlords can also benefit from engaging the services of a professional property manager. You’ll be granted peace of mind as a rental property owner.

Reach out to McKenna & Vane Property Management at (410) 381 3336. You can find out more about their services by visiting https://mckennavanepm.com.