If you want to keep the property so that you can benefit from tax advantages and capital appreciation but wish to offset the expense of the property then you should consider renting the property. This article looks at some of the advantages and disadvantages of renting out your property.
As you will legally own the property you will be responsible for covering all of the costs associated with ownership, including the mortgage, taxes and insurance. You will also be obligated to pay or carry out repairs around the property which were caused by general wear and tear. Even if you have not entered into a contract saying that it is your responsibility to repair the property, your renters will no doubt use this as an excuse not to pay their rent. It's not a good idea to encourage angry tenants.
You should get all prospective tenants to fill out a thorough application form, this should be constructed so that you can get all of the information your require to do a background check.
Make sure you check the credit history of the applicant. Note down any history of late payments. Check out their employment, it's also a good idea to talk to their previous landlords. Construct a fair, well balanced contract which clearly spells out the responsibilities and rights of both parties.
The contract should be easy to understand, so don't use any technical jargon. Also make sure that it's fair to both parties. State how much deposit is needed, and how much notice needs to be given for inspections by the landlord. It's also a very good idea to say who is responsible for specific types of maintenance.
The dates of payment should be accurately recorded. Whenever the payment is late you should find out why this is. A delay of just a few days shouldn't be any problem. Everybody experienced unexpected expenses at some time. However if your tenant is always late paying then perhaps you need to talk to them about it. Discuss this with them as professionally as possible. Show them that you can legally charge a late fee, and try to encourage them to pay on time in the future.
When the property is being rented, it's a good idea to ask the neighbors how they think the tenants are behaving. Do it in a friendly way, not one which will cause suspicion. You are not asking if they are friends, you're only interested to find out whether they are being a good neighbor. They should be tidying up any trash, and should not be creating excessive noise. If any form of legal action is required then it's a good idea to go down the route of arbitration.
It's important that you do all of your homework both before and after renting the property. This will make sure that your investment is protected as much as possible.
The mere thought of having to find a property to rent, whether this is your first go at it or you’ve become an experienced pro, can leave an undesirable taste in your mouth. Why? It almost always seems that every apartment that you’ve looked at (or will be looking at, if you’re new to this) seems to come up a bit short of what you really want (at least, among those in your price range). But not to worry, as with a bit of planning, you’ll be surprised at how smoothly and successfully your efforts can go!
Firstly, you need to decide upon the type of property you want to rent. Perhaps a one-bedroom flat will suit your needs nicely, or maybe a two-bedroom country house is more to your liking. Make a list, prioritize, and be open to suggestions, change and compromise; likewise, be aware of those features you aren’t willing to sacrifice at any cost.
Secondly, check online to browse the available flats and houses. To make your life easier, there are a few quality websites that aggregate listings, as they exist solely for this purpose. Again, make a list and prioritize; be open to suggestions, change and compromise. For example, maybe you really don’t need that second bedroom in order to keep the superb view of the city within your price range. Or maybe gas central heating is more important to you than living close to the train.
Thirdly, when you find a property that you’re interested in, be sure to research the building, the general area, and the landlord. A quick web search for the landlord’s or management company’s name will often tell you whether the tenants are treated well. If the property of interest is one in a larger development, you can always take a leisurely stroll during the day and ask quick, simple questions of any tenants you might see.
Likewise, you can get information on the neighborhood’s crime rate with a web search or by asking a knowledgeable realtor or someone who lives there. Alternatively, you can take a stroll through during the evening and observe the neighborhood for its typical social behaviors.
Above all, be mindful of your priorities, and do your homework! With so many resources available (both offline and online), there’s no excuse to get into a lease that will leave you unsatisfied.
Both Paul Gray & are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Paul Gray has sinced written about articles on various topics from Property Guide, Fitness and Motorola Cell Phone. Paul guides first time landlords on how to get the best from their buy to let investment. He has a deep understanding of