How to Successfully Rent Out your Residence (1/1)

If you’re thinking of joining the thousands of people generating passive income by renting out their homes, you’re in the right place.  There’s a lot more that goes into making this a profitable move than would initially appear.  It does take some careful thought and planning to ensure you and your tenants have a great experience.  Before you open your home for business, read on for tips ranging from how and where to list, to maintaining your property.

Consider hiring a property manager

How much money you make while renting out your home is determined largely by how well you manage the logistics of the rental.  If you have any doubts about how thoroughly you can address the daily needs of the property and your tenants, hiring a property manager may be worth more than it costs, especially if one or more of the following sounds familiar:

Property managers handle all the matters, big-and-small, that go into the upkeep and occupancy of your property.  They typically earn a small percentage of the rent income for their work, but greatly reduce the time and stress of making your property profitable.  If you’re not sure how, or don’t have experience marketing your home, selecting tenants, collecting rent, and keeping track of all the paperwork and legalities, consider searching for a great property manager before searching for your first tenant.

Make a better first impression with high quality listing photos

The less time your rental remains vacant, the more income you’ll collect from it.  Remember your prospective tenants invest their own time to search and preview rentals online.  The better they can tell at first glance that your property is well-kept and features what they’re looking for, the more likely they are to reach out and rent your home.  With that in mind, list your home with clear, high-resolution photos that showcase your entire place at its best.

Try out Airbnb or VRBO to list short-term rentals

If your residence is in a popular vacation site, and you’d like to split time between living there, and renting it out, listing on Airbnb or VRBO may be the best way to go.  These platforms simplify the process of listing your home for hundreds (or thousands) of short-term renters to view.  It’s also easy for them to directly book your home on the site,

Rent to quality tenants

Your tenants have a large role in if, and how much, money you can make by renting your home, so choose wisely.  In a nutshell, you’re looking for someone who is likely to pay rent as agreed, and be respectful of your home.  For starters, do a criminal background check, credit score report, and ask for proof of income.  In some cases, frequent relocations and/or job changes can be a warning sign.  Finally, do are they courteous and respectful toward you?  If you have any doubts, keep searching for a more reliable tenant.

Set your rates strategically

Profits on your rental are closely tied to the rates you set.  Most prospective tenants will shop around for the best place they can get per dollar of rent.  Research local rent prices for properties similar to yours and determine what amount, or range, would be competitive to for your home.  Before you list with this rate, double check that it is above your total cost to own, insure, and operate the property for a comparable length of time.

Insure your property with the appropriate policy

Renting out your home introduces a unique potential for losses and damages--you may need to purchase additional insurance to protect yourself and your property.  The Insurance Information Institute advises that any damages associated with renting may not be covered under your existing homeowners insurance.  If you need to purchase additional coverage, know that there are different policies for a primary home (bed and breakfast insurance) versus a secondary residence (landlord insurance).  Always check first with your policy provider for your needs.

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