5 Essentials for Renting Out Inherited Property
You weren’t expecting to have extra property to rent out, but through unforeseen circumstances you ended up with an extra house you don’t need to live in. Instead of letting it languish unoccupied, turn your unexpected boon into a long-term income stream to help you with your own bills. The slow recovery of the housing market results in higher demand for rental units. Take the time up front to rent out your inherited property the right way, and watch the money come in on the first of every month.
Determine Rental Pricing
You are free to set whatever monthly rental price you desire on your property, but if you price too high for the area you sit on the property without any bites. Compare rental unit pricing in your area and neighborhood to determine what average rates are. Bigger Pockets suggests looking at units that have the same amount of square footage, bedrooms and bathrooms, as well as additional amenities such as parking areas, included utilities and furnishings. Draw data from as many sources as possible to get a fair average for your area, to account for any high or low outliers. Zillow can give you a better idea of what the rental fees in your area are like.
Repair, Clean and Stage
Go through your house with a fine-tooth comb and make sure it’s up to your local building code. Once you’ve made any changes or repairs required by local government, thoroughly clean the house yourself or with a professional cleaning crew. Investopedia suggests you take the cleaning time to discover the highlight features of your house, such as spacious bathrooms, stainless steel kitchen appliances or a large backyard. Really make these areas shine and stand out.
You don’t have to decorate the whole house, but setting it up with some furniture will make it inviting to potential renters. A modern sofa and dining set will make it homey and large stylish wall mirrors will make rooms look bigger and brighter.
List Your House
Create a rental listing that provides the potential tenants with enough information to help them make a partial decision before they even see the home. Provide plenty of photographs of the interior and exterior of the home, or even film a virtual tour. Hotpads and Craigslist are two listing websites for rental homes, although hundreds of other sites also exist on local and national levels.
Screen Your Tenants
You’ve found interested tenants, now it’s time to find out whether they’re truly suitable to rent your home. Ideally, you want their income to be three times the monthly rental price, although in some markets, such as New York City and San Francisco, this isn’t always a reasonable ratio. You also want tenants with fairly clean credit reports, so use a tenant screening service to check tenant credit reports.
Manage the Property
The tenants are moved in, but your work isn’t done yet. Determine whether you want to handle property management or if you want to hire a company to do it for you. A property manager collects rent, takes care of repair problems and fields tenant complaints. If you want to hand off the day-to-day requirements of property rental in exchange for losing some of the profit to the management company, they can handle all or part of the rental chores. If you choose to manage the rental yourself, create a list of trusted contractors you can quickly turn to. The American Apartment Owners Association offers a comprehensive list to its members, that includes everything from masonry workers to carpet installers.