We recently covered four questions to ask yourself before buying an investment property. Now that you’ve taken the leap and made a purchase, it’s time to find some tenants! Here are 6 tips for renting out an investment property:
1. Understand the law.
Speaking with an attorney will ensure you are abiding by your state’s landlord/tenant laws, while calling your accountant to discuss impending changes to your finances will confirm that you are in compliance with tax laws.
2. Price competitively.
Research prices for comparable listings in your area and set the price of your property based on this information combined with amenities, size, and the convenience and safety of your listing’s location.
3. Find great tenants.
This can be difficult to do! Advertise on rental boards such as Craigslist and Rent.com. If you’re working with a real estate agent, they can list your property on the MLS.
You’ll also need to run credit checks and screen candidates’ past tenancy records and criminal history. Be sure you are in compliance with the Fair Housing Act, too: it is illegal to discriminate based on race, religion, gender, heritage, or family status.
Too much work? Another option here is to hire a property manager.
4. Get it in writing.
The lease agreement between you and your tenant must always be in writing. Ensure that correspondence regarding repairs is in writing as well–you always want a paper trail.
5. Understand your cash flow.
Write a budget for each year to better understand your property costs. Make sure to calculate foreseen repairs and general maintenance as part of your cost list. This helps to determine what charge for monthly rent.
6. Be insured!
Property and liability insurance are important protectors against damages incurred by natural disasters, burglary, and more. Don’t rent out a home without insurance!
Do you have tips to share for renting out an investment property? Join the conversation in the comments section below!