Turning your current home into a rental property can create income to pay your new mortgage or rent, handle your kids’ college education or save for a comfortable retirement. You may decide to invest in more than one house and create a rental property business. Regardless of your intentions, becoming a landlord takes more consideration than just finding a tenant and watching the money roll in. RPM MetroWest/Worcester offers some salient points for you to consider.
Preparing Your Home
Renters are looking to live in a safe neighborhood that is close to schools, shopping, and work. After meeting these requirements, you can appeal to higher-paying tenants if your home is turnkey and includes appliances. Several basic improvements can also help attract tenants:
- Changing flooring to hardwood and tile for easier maintenance for the renter and for you.
- Including wood or vinyl window blinds to cut down initial expenses for the tenant.
- Simplifying the landscape for ease in upkeep even if your renter agrees to maintain the lawn.
If you are planning to rent out your current home, you’ll also need to prepare to move. You can choose to pack up your own items, or hire a moving company to do that for you. Either way, seriously consider hiring a mover to help with the heavy lifting come move day. You can look online for the best moving companies in your area, but be sure to read their customer reviews. And avoid over-the-phone quotes. It’s best for the movers to see your space first. You’ll get a more accurate quote and you can more effectively judge their customer service before you commit to one company.
Finding a Tenant
There are many reasons why people prefer renting over buying, including no maintenance and flexibility in moving. Financial reasons, such as funding a downpayment or not wanting to pay additional taxes and insurance, also keep people from purchasing a home. According to one Pew Research Center study, more household heads are renters than at any time since 1965, so finding a good tenant shouldn’t be difficult.
Referrals from friends and family, word of mouth, and local advertising are good ways to locate a tenant. You can also market on your social media and on rental websites. Make sure you meet the renter in person, check out the prospective tenant’s social media and take the background check seriously before making a decision on placing that person in your home.
Creating a Rental Business
Being a landlord can be costly at times so be certain you are financially capable. You are responsible for any minor and major repairs, and not having funds to make them could put you in a financial bind. To offset potential surprises, Homestar suggests retaining the rental deposit and a portion of the rent each month in an account to pay for such expenses.
Handling one rental property can be manageable on your own, but when you acquire additional properties, you are getting into a lot more responsibility. Keeping your renters happy is key to retaining them. If you do not have time to properly take care of your properties, look into a property management company. Real Property Management MetroWest/Worcester provides quality residential property management in Massachusetts, and will handle finding you stellar tenants, running background checks, and addressing any repairs as they come up.
Consider establishing an LLC for your rental business to protect your personal assets and give you tax benefits. If you’re not sure how to form an LLC in Massachusetts, it is easy to do on your own or through a formation service without having to hire an attorney and pay legal fees. Each state differs in regulations to format an LLC so research the requirements in your location before applying.
Renting your home can be a lucrative investment. It isn’t for everyone, however, so make sure you have the time, dedication, and funding to keep up with routine and unexpected expenses. If you hire a management company like Real Property Management, it is in your best interest to be part of the vetting process and maintain a personal relationship with your tenants to create mutual respect for your property. Keeping your tenants happy can provide a rewarding living experience for them and a safeguard for your investment.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.
