Homeowners, have you ever dreamed of turning your beloved property into a reliable source of income? If so, now is the perfect time! With today’s housing market in favorable conditions and careful planning on your part, converting your home to a long-term rental could be an incredible way to supplement what you’re already earning.
Form an LLC
The first step in turning your property into a rental is to form an LLC (limited liability company) to officially become a business per your state’s regulations. This will allow you to separate your personal assets from your rental income and protect you in the event of any legal issues. Work with a formation company to determine what forms and processes you will need to adhere to form an LLC in your state.
Make Necessary Repairs or Renovations
Before you can start accepting tenants, it’s important to ensure that your property is in good condition. Consider making necessary repairs or renovations that will increase your property’s value and make it more attractive to potential renters. This may include fixing broken appliances, updating the bathroom or kitchen, or giving the property a fresh coat of paint. Adding a garage is a great way to attract good tenants and increase the property value, as well! Use Garage Calculator to help get an idea of what the cost will be.
Utilize Technology to Spread the Word
In the digital age, there are a variety of apps and technology solutions that can make managing your rental property easier. Apps like Thumbtack or HomeAdvisor connect you with local contractors that you may need for updates and repairs. Other apps like Cozy or Avail make it easy to collect rent and communicate with tenants through a user-friendly online interface.
That being said, don’t just rely on the internet to spread the word. Keeping a stack of sleek-looking brochures on hand is a great idea, as well, and using a tool to create your brochure for free will save you money while also supplementing your other marketing efforts.
Research Local Housing Codes
It’s important to research local housing codes and ensure that your property is up to code. This is not only for the safety of your tenants, but also to protect yourself from any legal issues. Make sure that your property meets all requirements, including fire safety standards, electrical codes, and any other relevant laws.
Develop a Realistic Rental Income Budget
Planning for rental income can be tricky and requires careful consideration of location, property condition, market trends, plus a variety of expenses. Calculate what you’ll need to stay financially afloat by factoring in payments like mortgage or insurance premiums. Also, don’t forget taxes and all the associated costs that come with managing and marketing your space.
Hire a Professional Property Management Service
If you don’t have the time or expertise to manage the property yourself, it may be worth considering a professional property management service. These services can handle everything from finding the right tenants to performing maintenance and repairs. You’ll pay a fee for their services, but the peace of mind and convenience they offer can be well worth it.
Screen Potential Tenants
Screen potential tenants thoroughly using a written application, credit reports, and employment documentation. Look for tenants who have a stable income, good credit, and a solid rental history. Set clear expectations upfront so that both you and your tenants understand the terms of the lease agreement.
Develop Clear Communication Channels
Develop clear communication channels for your tenants and maintain regular contact. Make yourself available to answer any questions they may have and address any issues promptly. Develop a system for handling maintenance requests and emergencies, and provide tenants with your contact information and that of your property management service if applicable.
Turning your home into a long-term rental can be a lucrative endeavor, but it requires careful planning and attention to detail. By following these tips, you can ensure that your rental property is well-maintained, attracts quality tenants, and provides you with a reliable source of income. With the right approach, your rental property can be a valuable asset and a source of pride for years to come.