Buying a house and then renting it may be a good deal for many. In fact, real estate investors have gained much from this practice because in these times when not everyone can buy, houses for rent are more than a necessity. However, if you are buying a property to rent it is good idea to get your bearings.
Evaluate the obligations and know your and your tenants’ rights, as well as the process involved. Take into account the following:
Rental restrictions
Depending on the conditions under which you bought the house and the type of loan, you might find limitations to rent. The restrictions will be based on the rules of the community where you live. In case you do not abide by the rules, you may have to face legal proceedings. So beware and follow the rules defined.
Rent directly or through an agent
The services of an agent when it comes to renting are usually divided into two. This basically includes advertise the property, finding the tenant, customer research, pre qualifying your credits and employment, and make the contract. In lieu of the services offered, the agents usually take the amount equivalent to one month’s rent and the tenant continues to pay the property owner directly.
They can also do what is known as “property management”, where they charge the rent monthly, perform the required inspections as mentioned in the contract, and keep in touch with the tenants in case of problems with housing or in case there is need for some repair. In that case, they charge a percentage of the payment of rent and are responsible for sending the rest to the owner.
The lease
You should know the laws and rules governing the contracts of the place or community where you live, without the interference of any real estate agent. Here you have to follow what the law dictates while you make investment in lease house. The contract should state the terms and conditions of the rental. Since the prices go up with the inclusion of the appliances and home accessories, you need to take care of the final costs. You must also specify the number of people living in it and the personal data from them. It is also equally important for them to abide by the rules of the community, including parking. The document must have the payday and the maximum period for receiving without penalty. It is a good idea to include repair information, and what are your obligations as a property owner.
What to do with the amount
If you think that you can use the deposit by the tenants as per your wishes and return it when the tenant moves, then you are wrong according to the contract. In many places, they ask you to save the amount because you do not own it. Make proper research first.
You have to return the deposit always to the tenant. If you have to repair, replace or clean the property, you must inform the tenant in writing and notify the cost of each service.
Your commitment as owner
You must remain updated about the repayments, mortgage, taxes and insurance. It is important to notify your residents’ association about your tenants because they require the information of people living in the community and also require some criminal background check.
If you rent without an agent, then you must take care of a home inspection as specified in the contract and maintain communication with the tenant. In case of payments, repairs and any problems arising on the property, prior and clear communication is very important.
