Things To Consider Before Renting Out a House

by Linda Cappello, Broker, GRI, ABR 11/18/2018

Many property owners at some point consider renting out their house. Whether it’s a property they inherited, a summer home they rarely use, or they're just trying their hand at property management.

 It's a common misconception that renting out a house is passive income. You'll have to do a lot of work if you plan on keeping your tenants around and paying their rent.

 In this article, we’ll discuss some of the things you should consider if you're planning on renting out a house or property you own.

The rental process

Some landlords take shortcuts during the rental process to save time or money. However, doing so could cost you big time in the long run. If you don't utilize a real estate agent, draw up the proper contracts and agreements, or fail to do due diligence with walkthroughs, you could easily end up losing money on your investment.

The safest approach to finding reliable tenants and renting your property securely is to use a property manager who knows the practical and legal aspects of renting so you don't have to worry about making any beginner mistakes.

DIY property management

If you decide you want to save money and manage the property yourself, there are a few things you should keep in mind when looking for tenants.

First, use background checks and credit checks to ensure your future tenants are in good financial standing.

Next, ask for references on your application, preferably from former landlords. Most landlords will happily let you know if their tenants were good about making on-time payments or were difficult in other ways.

When it comes to your lease, don't try to write it from scratch. There are several templates available online. Try to find one that covers most applicable laws in your area, then hire a lawyer to read over your lease and make any pertinent changes. 

Finally, be sure to collect a security deposit or first and last month’s rent. This will give you some protection if your tenant stops paying or causes costly damages in the building.  

Know your legal limits

If you've ever rented before, odds are there were a few things you wish your landlord did differently. Before beginning this endeavor of becoming a landlord, make sure you're doing it by the book.

Find the laws for your state and city regarding landlord/tenant requirements. Know when you can enter the apartment and how long of an advanced notice is required to do any work in the apartment.

Before sending any complaints or notices to your tenant, make sure you are in the right, legally speaking and can back up your claims with evidence. To do so, you'll need to practice rigorous bookkeeping. Document and keep copies of each payment you receive and all of the money you spend on repairs and maintenance. These records can help you should you ever need to prove yourself in a court of law.

Finally, be respectful and courteous with your tenants. Going out of your way to be helpful will often save you headaches in the long run. However, know when your leniency is being taken advantage of by tenants who are avoiding paying rent or abusing your property.

About the Author
Author

Linda Cappello, Broker, GRI, ABR

Linda A. Cappello, Owner/Broker of Cappello Realty Shoreline Properties. Cappello Realty is a full service boutique Real Estate firm that specializes in 06855 - East Norwalk, and services all of Norwalk and Fairfield County, CT. Linda has been in the Real Estate business for 20+ years, spending 18 of them as a Owner/Broker. Being a Broker adds a lot responsibility to her job. She is responsible for overseeing every transaction and agent in the office. This is a challenge that she looks forward to and takes very seriously. She is constantly taking continuing education classes and attending seminars to keep abreast of the ever changing market as well as the industry standards, rules and regulations.  

She is a native to East Norwalk, and has an in-depth knowledge of the city that she loves, as well as the intricacies of the many unique neighborhoods and areas that Norwalk offers. Linda offers her clients a network of professionals ranging from Attorneys, Mortgage Brokers, Home Stagers and Home Inspectors to any and all pros that you may need for a successful transaction and for the convenience of her clients.  

"My job doesn't end at the closing table. It goes far beyond that, keeping in touch and staying friends who refer their family and friends. A lot of my business is referral business which is the greatest accomplishment and honor of all. Earning my clients trust."