"It is possible to enjoy increased worth by renting the home you are currently living in. And being able to do it yourself without using an expensive property manager or management company. Maybe you are downsizing, or the miracle is arriving and you need a bigger home. With the home market being a buyers market this is a good time to think of yourself as not just a home owner, but a holder of properties. Your former home can be used as a rental and you can enjoy the increased wealth of owning assets, using the equity of rental properties to increase your overall wealth, and enjoying the status of being a landlord. The following tips can help you achieve the goal of property proprietorship, and increased income.
The first step is identifying your means and expenses. You probably already know well your earnings, your outlays each month, and use a budget. Taking this information to a mortgage broker will help you understand the price range of a new bigger or smaller home for your family will be. The Mortgage Broker can help explain costs, interests, and the bottom line, the monthly payment. Of course the number one item that makes this visit to your Mortgage Broker is that you will have consulted the Classified Ads, called Rental Agencies, and has determined the amount of monthly rent you can get for your current home. This additional asset listed at your mortgage for a new home will reduce points and maybe down. It is of benefit to you if you are able to find a willing tenant for your rental home before purchasing your new home.
It is never easy to be a landlord. The expenses can be numerous and even excessive should your rental need repairs or upgrading. Plan ahead price and get a Home Warranty plan to cover major repairs. Before renting your home is sure it is met of certain codes, such as installing GFI electrical switches and plates. That all the plumbing is working and very adequate. Review the rental homes landscaping and reduce hazards, reduce plantings to reduce water use, and decide clearly who will take care of the yard. A sure money saver would be to install an time/auto watering system and hire a regular landscape company. If your â€œrental home has a pool find the pool man before renting.
It is essential to have these costs before you when computing the monthly lease or rental amount. Purchase a landlord insurance policy to cover your investment/rental property from fire and hazard. Of course your Tenant will need to purchase any rental Insurance separately 6o cover their property or liability. And remember almost all rental property expenses are deductible when tax time comes. Good tips start a unit at lease in good repair, clean and freshly painted.
Should you lease or rent? The major difference of the two is the agreement you will sign with your prospective tenant. Rentals tend to be for shorter terms while leases are of necessity of longer rate and time. Lease can also be transferred sublet. Considering your investment it is important to seek the help of an attorney in recommending a lease agreement to be used. It is possible to successfully mange your rental without the help of a property management company but you probably will need an attorney to help get you started, or aid you should you and your tenant have any conflicts. And of course you will need to learn some basic record keeping skills, and maybe will need a professional tax preparer. No landlord these days should rent their units, property, until they have done a back ground check on any potential tenant. This can be done on -line and the charge should be part of the deposit a potential tenant makes at inquiry of leasing.
What will you require of a future tenant at lease signing? One they will have to pay you a processing/application fee sufficient to cover expenses such as the back ground check and employment verification. It is standard that a tenant makes a deposit at Leasing equal to the first and last months rent쳌 amount. Please make sure you, and/or your attorney specifies the use or possible refund of this Deposit in the Lease Agreement. Be sure to carry this Deposit amount in a bank account you use separately from your personal monies. This will help you at tax time, in obtaining loans or mortgages. Are you going to allow pets? What size, how many? This to has to be spelled out in the Lease Agreement as well as the amount. Will they be refunded? No is my recommendation. Learn simple bookkeeping to track incoming and outgoing monies. Keep receipts. And always give receipts and emergency numbers to your tenant.
Use your time with your attorney wisely. Go over his or her charges for such problems you might encounter. How about liability issues should an accident or hazard, or a fire occur. How about eviction, how is it done, and what will it cost? Are there alternatives to eviction? Remember that many attorney fees you pay are tax deductible. Congratulations you are a small business owner, a landlord! You are a do it yourselfer
Your product is a wonderful home for a potential tenant. Will you be renting to adults only? Will you allow pets? Specify these and the positives of the home you are r to offer for lease in the ads you place. Use the local classified. Use local magazines. Use word of mouth. .Do not forget to include your phone number or e mail address. And be sure to list the rental/lease and deposit amounts. Will the tenant provide appliances; pay all or some of the utilities. Keep the receipts for these expenses are tax deductible as a business expense.
Showing your retal can be time consuming. First clear from showing those who are not serious. Ask if they are employed, if they could pass a back ground check, are they willing to enter into a long term lease agreement? Maybe their family composition including pets does not meet your requirements of a tenant. Establish specific times to show the rental and stick to it. Make sure your family members understand which household member will do the talking and let that household member do the showing and then lease requirements. Too many cooks can confuse.
Communication is a key to being a good landlord. Not only will you need to be a good listener and available to hear what your tenant needs you must be able to communicate what you expect or need. A concise Lease Agreement begins this process, and you can remember that putting"
Posted on Jun 03, 2010