Whether you’re looking at condos for investment property or if your thinking you want to rent your condo when you buy a house or relocate for work, it’s important to know how to prepare it before you can put it up on the rental market.
Renting out a condo can be a great way to earn some extra income but is a different process than renting an apartment.
In this guide we’ll walk you through the following:
Know Your Responsibilities as a Landlord
Screen Prospective Renters
Ensure the Furnishings Are Clean and Appliances Are Functional
Inform Your Mortgage and Insurance Company
Determine the Market Value of Your Condo
Manage Your Money
Hire a Home Inspector
Create Lease Guidelines
Make Your Condo Presentable
1. Know Your Responsibilities as a Landlord
You need to be well-informed about your responsibilities as a landlord. Can you handle the responsibility that comes with being a landlord? You will need to juggle being a landlord with your personal and work life. For instance, you will be responsible for repairing and maintaining your condo.
You also need to prepare yourself to encounter unmanageable tenants who may not pay rent on time or keep your condo in a poor and unlivable condition, resulting in you making additional repairs to it and prepare it for other tenants to move in once they have vacated your condo.
If you want to rent out your condo, but you don’t think you can manage the responsibilities that come with being a landlord, you can hire a property management company to handle your property on your behalf. You can even advertise that you’re looking for a property manager to look after your condo.
2. Screen Prospective Renters
You need to screen prospective renters to ensure they will not create trouble or problems for you down the line. Provide them with an application form where they write their names, the name of their employer, the names of previous landlords, and references. Ask for their social security number as well and obtain a signed authorization to check their criminal history and credit card reports.
3. Ensure the Furnishings Are Clean and Appliances Are Functional
Inspect the furnishings and appliances in your condo. Are the furnishings clean? Are the appliances functional? If the furnishings are not clean or are damaged, replace, repair, or remove them.
You can clean the entire condo, including windows, floors, blinds, and carpets using cleaning products that will make them good as new. If an appliance is broken, get it fixed. You also need to ensure the appliances are not dirty. Make your condo seem like the perfect place to live in at for prospective renters.
4. Inform Your Mortgage and Insurance Company
Contact your mortgage and insurance company to inform them that you will not be living in the condo, as you are putting it up for rent. Your mortgage company, in order for them to protect their security interests, will ask you to meet specific requirements that have been established for landlords.
Additionally, inform your insurance company that you want to convert your homeowners insurance coverage to a landlord property insurance coverage, given you used to live in your condo. If you have bought the condo for the purpose of renting it out, obtain landlord property insurance coverage from the beginning.
5. Determine the Market Value of Your Condo
Calculate the monthly costs and look at the comparable rental properties in and around your location to determine the amount of rent you will charge your tenants. When you advertise your condo to prospective renters, highlight features of your condo that will convince renters to consider it.
6. Manage Your Money
You need to have a separate business bank account and establish your bookkeeping and record keeping systems before you advertise your condo in the rental market. Doing so makes it easier for you to manage and monitor your rental income and expenses. When tax season comes, you can deduct expenses from your gross rental income.
7. Hire a Home Inspector
You can contact a home inspector to visit your condo and inspect it. The home inspector will ensure the structures and systems of your condo are in proper working condition. They will check to ensure the smoke detectors work and an alarm system is in place to detect and alert you and the authorities of a break in.
Moreover, consider painting the condo and replace damaged or stained fixtures, counters, and flooring. Be sure to clean your property before you invite prospects to visit your condo for a tour.
Check out the International Association of Certified Home Inspectors, www.nachi.org, for more information on selecting an inspector.
Home inspection fees vary but are usually well under $1,000. Considering how much an inspection can save you by avoiding potential disasters, it’s money well spent.
8. Create Lease Guidelines
You need to create lease guidelines, which will include the monthly rent you will charge and when the tenants need to pay it. In it, you need to mention the penalty fee if tenants pay rent late and after how many days you will charge them late fee.
In addition to all of this, tell your tenant to provide you with a security deposit when they sign the lease to rent your condo. If you are unsure on how to develop lease guidelines, you can consult with either an attorney or a real estate professional to assist you with it.
If you would like to take matters in your own hands, though we highly recommend speaking with a legal representative, you can use this simple guide to creating a lease via WikiHow: How To Write a Lease
9. Make Your Condo Presentable
Most importantly, you need to make your condo presentable. When prospective renters visit your condo for a tour, you need to entice them to rent it. You need to cut the grass, trim the bushes, pull the weeds, clean windows, polish woodwork, remove family photos and personal décor, replace any bulbs, open the curtains to let the light in, and change air filters. If you want, you can hire a professional cleaning service to clean your condo, making it shine and presentable for prospective tenants.
If you have bought a condo or are moving out of it and wish to rent it, you need to take these steps mentioned here before you do so. For your condo to go off the renting market within a month or less, you need to advertise it on several online platforms such as social media and other websites used for this purpose.
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