Becoming a Landlord: 5 Steps to Renting Out Your Home
Perhaps you’re moving to live closer to family, relocate to a better community to enjoy your retirement, or simply for a change of scenery. And if you’d prefer to hold on to your family home instead of selling it, you may want to explore the idea of becoming a landlord. Here’s how to form an LLC for your rental business, design business cards to advertise your rental, and more, courtesy of Sandra J Ward Realty Inc!
Establish an LLC
You may not have realized that the LLC structure can apply to rental properties – but it’s possible to register your rental business as an LLC and reap the benefits! This will grant you additional flexibility in your operations structure, and you’ll also keep your personal financial assets protected. You don’t necessarily have to pay a lawyer to file for you, either. You have the option of filing on your own or going through a budget-friendly online formation service to stay in compliance with your state’s regulations.
Renovate Your Home
Don’t list your property for rent until you’ve taken care of repairs. After you’ve ensured that all of the appliances and systems are working properly, consider undertaking bigger renovation projects to better appeal to tenants. For instance, Thirlmere Deacon recommends installing a security system, investing in modern, energy-efficient appliances, adding storage options like more shelves and cabinets, and brightening up the space with enhanced lighting.
Now is a great time to establish a new service from Frontdoor. Their platforms allow you to quickly and easily connect with contractors in your area. Plus, you can connect with a real estate professional in this same way if you choose to sell instead of rent. There are even warranty and product coverage options to protect your investment, so look into your options as you begin renovating your property.
Set Your Rental Rate
Now, it’s time to determine how much you should charge for your rental on a monthly basis. Setting a fair rental price can be complicated, and the right price will depend on a few factors. For instance, you can use online rental search platforms to research prices for properties with similar square footage and features in your area. Ideally, you’ll want to ensure that you’re charging anywhere from 0.8% to 1.1% of your home’s estimated market value.
Hand Out Brochures
Marketing is the key to getting the word out about your property and attracting potential tenants. Let your family and friends know that you’ll be renting out your property, advertise your rental on social media, and hand out brochures! A brochure is an informative, eye-catching memento that people can hold on to, and you can use an online tool to create your brochure for free, leaving a tangible impression that digital media can’t replicate.
Land Your First Tenants
You’re ready to start putting out feelers for your first tenants! After advertising your property locally, you should get some prospective tenants reaching out to you. To find tenants whom you can trust, RentPrep recommends conducting comprehensive background checks. Chances are, a tenant who has had problems paying rent in the past will have problems in the future.
Look for any past evictions, issues with poor credit, or a history of late or missed rent payments. You should also ask tenants for references from past landlords. Finally, decide how you’ll communicate with your tenants. You may want to settle on using email, text messages, paper bulletins, or phone calls. Just be consistent.
Bonus: If You Decide to Sell
If you decide to sell your house instead of renting it out, it’s helpful to know what other places are charging, so check the market in your area. While selling means you might not get as much of a return in the long run, it also means you’ll have less responsibility for maintaining upkeep on the house, and that lump sum could be a great benefit to your retirement!
Get Your Home Ready to Rent
Turning your home into a rental can allow you to bring in some additional income. Plus, it leaves you with the option to move back into this property one day if you’d like. By following these tips, you’ll be ready to file for LLC status, create your very own business cards, and find reliable tenants!
If you’re looking for a new property to convert into a rental, or if you decide to sell your home instead of rent, contact Sandra J Ward Realty Inc for all of your real estate needs!