With the median sales price of homes in Knoxville, TN, registering a 13% year on year decline in the month of May 28-June 28, 2017, renting out your property might be a better bet in the current times. This is supported by the fact that Trulia reported that the median rent for apartments in Knoxville remained flat at an average of $1,200 per month for the same time frame. Renting does have its own benefits. Apart from the fact that it gives you a regular source of income, it can be a good way to wait out a slump in the real estate market.
However, being a landlord comes with its own set of responsibilities and challenges. If you are planning to rent out your property, there are some things you should keep in mind before taking the plunge.
Being a Landlord Comes with Responsibilities
Yes, renting is a good way to keep your property safe from squatters and vandals. However, Murphy’s Law tells us that if something can go wrong, it will. So, you should be aware that you will need to take care of all regular maintenance and repair on the property. This might also mean higher insurance premiums to deal with and keep a check on whether the tenants are taking care of the place.
The Home Needs to be Prepared for Rental
Firstly, no one is going to rent a place that looks like it is falling apart. And, to be able to ask for a good rent price, the house definitely needs to look appealing and feel inviting. So, make sure you check the property thoroughly, checking each room and the front and/or back yard, if any, to make sure that everything is in working order. If you need to take on some home improvement projects, do that too. Remember, prospective tenants will check out everything and they usually have high expectations.
This also means that you need to determine a budget for the renovation. Do your research on the going rent rate in your area and budget your home improvement such that you can recover the amount spent within 6-8 months of renting out the house. However, if you are looking at long-term rental for the property, you can invest more to ensure that things stay in optimal running condition for longer.
Renting out a home comes with its own share of paperwork, regulatory hurdles, and laws and area codes to comply with. Rather than handling it all on your own, enlist the services of a professional, who has experience in your region. This will also come in handy when you need to list your property for rental and then screen prospective tenants. Then, there is the lease agreement that needs to be drawn up. Remember, people are not really how they seem at first glance or even during a first meeting.
When you hire professionals, they can help you with background checks of potential renters you’ve short-listed, such as their credit score, record of previous rentals, whether they have ever been evicted by a landlord, whether they have a criminal record, etc. After all, you want people on your property who will look after the place, pay their rent on time and not bring in unsavory elements into the neighborhood. In addition, a professional can help you work out a good rent rate for your property and also negotiate the best deal possible for you.
Renting out your property comes with perks and duties, just like any other job in the world. Make sure you do your research well before you finalize any deal.