So maybe you had a “starter home” for a couple of years, and have now found your dream home. Or, maybe you inherited a deceased family member’s home. Heck, maybe you want to travel the world for a year. These are all great opportunities for you to get into the rental property game!
Here are the basic steps you’ll need to follow to rent out your house:
Step 1: Research Your Local Rental Market for Demand
You need to know if there is a demand in your area for the place you want to rent. Look in your local paper at the rental ads, if there are a good number of ads for places like yours, then there is likely to be a big demand. You can also go online to Zillow.com and see what is listed for rent there.
Step 2: Find Rental Prices
While you are researching, make sure that you are also making note of what your property type is renting for. In our area, we can charge quite a bit for a single family home, as they are in high demand and are difficult to come by. Most renters of these properties stay in them for years, which is great for the landlord, but tough on the potential renter.
Step 3: Make Sure Odds and Ends are Taken Care of
Now is the time to take care of the 20 little things that need to be fixed. That outlet that doesn’t work, that drain that drains a little slow; these things should be fixed before you rent the place out. When try to do as much work as possible before we get a place rented, that way everything is taken care of and we don’t get calls at all hours for little things that stretch out over a month. You will also want to clean the place from top to bottom. Hire it out if you have to, but if you want to attract good people, you need a clean place.
Step 4: Advertise it!
There are quite a few ways to do this. Right now, we advertise in our local paper’s online section (it’s free!), Postlets through Zillow.com, and word of mouth. If you can include pictures in your ads, you definitely want to do that. It will help attract the people that you want. Also check out the post about placing a great rental ad.
Step 5: Field Calls/Texts from Potential Renters
As you are fielding calls and texts from potential renters, you want to get the people you are interested in to look at the property in person. You can eliminate a good amount of people just by talking to them on the phone. This is what you want. You don’t want to waste your time showing your place to people that you won’t rent to. If they ask for you to “work with them” on the deposit, or have a pet when you said no pets. No, no, no. Only schedule showings with people that don’t ask for concessions right off the bat, it will save your time and sanity. See this post about scheduling property appointments.
Step 6: Show Your Place
Now is the time to meet people in person and get to know them. It’s kind of a strange game at this point. The potential renters need to decide if they like your place, and then you need to decide if you want to rent to them. When I show a place, I am never a salesman. I just let them look around and answer any questions they may have.
Step 7: Decision Time
Once you’ve shown your property to several people and several tell you that they are interested, you have to make a decision about who you’d like to rent to. Truthfully, this is where the “horror stories” come from. The most important step in renting your house is to find good people. I’ve been at this for a long time, and I can tell you that every time, EVERY SINGLE TIME that I had a strange feeling about someone but didn’t listen to it, I got burned. Trust your gut. Does their story check out? Are they polite? Are all of your interactions with them professional and appropriate? It can take some time to find someone you really like. That’s ok. Sometimes, if your place hasn’t rented as fast as you would like, you start to get desperate and make concessions in your mind. Don’t do it! You could be dealing with these people for years, so think about that as you are making your decision.
Step 8: Sign the Lease
Once you’ve decided on your renter, you need to set up a time to sign the lease. Sometimes, things fall apart before you sign a lease. These people are looking for a place to rent so if you don’t make a decision fast enough, they could be long gone. Make a decision quickly, and then schedule to sign the lease as soon as you can with your desired tenant.
Step 9: Start Collecting Rent
The first month or two are where you will probably find out if you chose a tenant wisely. Things should run fairly smoothly from here on out. Keep in contact with them more often at first. Check in to see if everything is working properly. Fix anything that comes up as soon as you can to develop a good relationship. Then you can hopefully enjoy many years of rental income for almost no work for years to come!