If, for some reason, you have a piece of property that’s got potential to rent out, this could be a good idea. Renting your house out could pay the mortgage and then some. Some Australian homeowners even rent their house to several people, arranging for student housing or making a home into a two family home as a duplex or with a basement apartment.
Deciding to rent out your place is a personal decision but here are some tips that you should consider, when you do decide to rent out your property:
- Lease Terms
How will you rent the property? You can advertise on free online classified sites or in yoru local newspaper. If you’re targeting local students, you might want to put an ad up on a bulletin board. Many homeowners who prefer not to go through the hassle of renting the property out will hire a real estate agent to do it for them. The real estate agent’s fees are usually reasonable enough to make the process streamlining worthwhile.
Will you interview potential candidates? Having potential renters fill out a renter’s application is a good idea. Sure, you can check their references (chances are that references will often include family and friends who won’t say anything negative) but you should check their work references as well. In some cases it’s also pertinent to do a credit check.
Finances are a big thing in the rental process. Determining the finance level of renters you want to attract will often happen as a result of the rental fees, the neighbourhood the home is in, etc. You’ll also want to think about your own finances in order to safeguard and maintain the place.
Tip: If you’re counting on the rental income to pay the mortgage, always make sure you have a buffer aside in your finances in case of repairs, late rental payments, and so on. Consider opening an account just for the purposes of handling the rental property. This can make expense and profit tracking easier as well.
What will the terms be? Lease or month to month? Will you allow pets in the rental property?
Who is going to handle maintenance of the property? If you’re going to do it, you might have to be prepared for the potential for untimely repairs. Some homeowners who have rental properties will assign a maintenance company to handle these things for them. It all depends on your desire for involvement or lack thereof. There are a lot of things to consider but the right tenant and/or the right setup could make it worthwhile for you.