As the housing market makes a slow recovery, many families have opted to rent homes instead of buying. And some homeowners have discovered that renting a home is a smart financial move. If that’s something you’ve considered, let’s talk about your options. When we do, we’re going to consider a number of things, including how much you’ll rent your house for and whether or not to consider professional property management.
When you’re trying to determine how much you can charge for rent, you need to consider several things. First off, how much are homes similar to yours in similar, nearby neighborhoods being rented for now? Going to high over the average is going to turn away some potential renters. You can determine the lowest possible rent by considering the costs you will still have for the home after you’ve rented it out. You’ll be paying, at the least:
- Mortgage Payments
- Major Repairs
Depending on your individual situation, you might also be paying for utilities, yard work, minor maintenance and professional services like a property management team and a legal consultant. Adding all of the costs up will give you a ballpark expense just for owning the home. You definitely don’t want to lose money by renting, so the rental price is going to be higher. Working together, we can set a rental price that will make the house a reliable investment and be attractive to potential tenants.
Before any potential tenants every see it, your house needs to be:
- Empty (unless you want to rent it furnished)
- In good working order (no repairs or maintenance needed)
- And up to code
Now comes the important question. Are you going to be the landlord or will you have a property management team handle dealing directly with tenants?
There’s a lot to consider when screening tenants, signing rental agreements, and handling the daily chores of dealing with maintenance requests and other issues. If you’ve been a landlord before, you already know what you’re getting yourself into by handling the duties yourself. If you’ve not been a landlord, or don’t want the extra work of being one, you can consider using a property management firm. They’ll charge a fee to handle all the aspects of renting a house for you. For example, ten percent of the monthly rent, and perhaps half of the first month’s rent.