Real estate assets can be a source of consistent income for their owners when rented out effectively. One can use the money generated from rent payments and direct them toward settling bills and building equity. If one looks to monetize one’s property, then one will benefit from a planned approach to renting. Various measures like market research and tenant screening will help owners maximize their passive income and minimize risks.
Steps to rent one’s home successfully
1. Researching local renting laws
There are several local, state, and federal landlord-tenant laws governing elements such as leasing periods, the legality of leased properties, and data related to tenants. An example is the Fair Housing Act of 1968, which enforces punitive measures against landlords who discriminate against rent applicants. It is the renter’s responsibility to follow such laws during the tenant screening process and other phases of lease agreement signing.
2. Determining competitive rent price
In this step, landlords must also choose rental rates that attract tenants and help them earn a decent monthly income. Setting the right rent price is important, as overpricing can deter potential tenants while underpricing may reduce profit. To get a better idea of competitive rates, landlords can hire experts to determine the average rent price for similar properties in their location.
3. Advertising property listings and screening tenants
To ensure that one’s rental property reaches the right audience, one must leverage multiple online rental listing sites. When posting about one’s property being listed for rent on such platforms, it is important to include high-quality images, a brief but comprehensive description, information about the key amenities, terms and conditions, and the rent price. Many specialized portals simplify this process for landlords by simultaneously posting on various online rental listing sites and helping them save time.
Once the applications start coming in, one must closely monitor each applicant’s tenant screening report, which includes details such as credit score, eviction history, and criminal history. One can also communicate with their previous landlords to learn each applicant’s history. While the screening process can be time-consuming, it helps one avoid potentially problematic tenants and identify trustworthy candidates who pay rent on time.
4. Onboarding new tenants
Since tenant screening and the necessary paperwork evaluation take up a fair amount of time, the process of rejecting or approving applications and onboarding rentees must be done quickly to avoid prolonged vacancies. Leverage property management platforms to onboard tenants. These platforms also offer functionalities that streamline rent payments, lease agreement access, and submission of maintenance tickets.
5. Determining a lease renewal process
Landlords must hire solicitors to help them determine and legally secure terms and processes for lease renewal once an ongoing agreement expires. Legal experts will add terms, conditions, and clauses into the agreement to secure the landlord’s property from hostile takeovers and safeguard landlords from any illegal activities the tenants may carry out while occupying the property.
6. Collecting rent securely and quickly
It is important for landlords to collect rent from tenants timely to maintain a steady income. One can use rent collection apps to send automated reminders, automate late fees, and collect rent, thereby reducing the need for manual follow-up. Since rent rates tend to fluctuate depending on market conditions, it is the landlords’ responsibility to change rental rates and the terms of stay for the tenants.
7. Implementing a maintenance tracking system
Although property management is a shared responsibility between landlords and renters, it is important for the owners to ensure their property’s safety. Ignoring timely maintenance may lead to high renovation expenses and dissatisfied tenants. So, landlords should stay on top of any maintenance issues identified. Maintenance tracking can be overwhelming, especially if landlords have multiple rental properties. To simplify the task, they can manually log maintenance requests or use extensions on intuitive property management tools to keep track of maintenance issues.
Tips to maximize income from a rental property
1. Renting out fully furnished apartments
Several tenants, especially short-term renters or families that are relocating, prefer furnished properties. So, if landlords incorporate essential furniture and modern appliances into their space, it allows them to charge premium rent prices. Fully furnished apartments with refurbished appliances and plumbing settings enhance a space’s appeal and justify the higher rent for short-term residents as well as normal tenants. Furthermore, upgrading amenities like Wi-Fi, security systems, or energy-efficient appliances can lure high-paying renters.
2. Offering additional storage space
Landlords can offer additional storage space to tenants in the form of repurposed (if unused) basements, crawlspaces, attics, and common area closets. Repurposing these spaces can be expensive, but this is also one of the best home rental income tips, as landlords can add that money to the payable rent that will be collected from tenants. Tenants often appreciate the added storage space. So, to make this one of the more profitable home rental strategies, landlords can market these extensions as valuable add-ons and include a slight premium to the rent amount in exchange for including more cupboards and storage cabinets in the property.
3. Purchasing the right insurance
Unforeseen incidents such as property damage or renter disputes may sometimes result in expensive lawsuits. In such scenarios, one must safeguard one’s property by purchasing landlord liability insurance. An insurance policy like this prevents one’s profit and savings from being wiped out by the cost of a single lawsuit from tenants. The policy covers attorney fees in the event of a legal issue as well as property damage.