Should You Rent Out Your Home?
People rent out their homes for a number of reasons. Some do it as an investment, while others do it by necessity—through a job change, relocation, or even the housing market.
If you’re considering renting out your home, you’re not alone. In fact, according to a report by the Joint Center for Housing Studies at Harvard University, more than 3 million owner-occupied homes were converted to rental properties between 2007 and 2011.
Before you decide to rent out your home, here are a few things to consider.
It’s important to choose the right tenant.
Be prepared to do application forms, pre-screenings, credit checks, home tours, and personal interviews with several different tenants before finding one that’s right for you. (If this process sounds a little daunting, the ReeceNichols Rental Department can assist you with tenant selection.)
Get a signed lease and security deposit.
Always use a written, signed lease—and make sure that the language includes:
Be ready to handle emergency calls—24 hours a day.
If the kitchen pipes burst in the middle of the night, your tenant will call you to fix it—since it’s your responsibility to make sure the home is safe and operational. If you’re not prepared for 24-hour-a-day emergency calls, consider hiring a property management company to do it for you. (For example, ReeceNichols partners with KC Rental Source to provide complete property management services—for as little as 7% of the monthly rental rate.)
Get the right insurance.
Renting your home to a tenant requires a special insurance policy—different from a standard homeowner’s policy. You’ll need to protect your home with rental home insurance, which covers not only the structure of the home, but also legal and medical costs and loss of rental income. Tenants will also need their own renter’s insurance policy to cover their belongings.
Be comfortable with the possibility of evicting a tenant.
Even though it’s a worst-case scenario, you’ll want to be mentally and legally prepared to evict a tenant if you have an issue with non-payment (or even property destruction). Eviction requires an attorney, a court visit, and coordination with the sheriff’s department.
Thinking about renting out your home? We offer a comprehensive home rental management service—from tenant screenings to property maintenance. Talk to a ReeceNichols leasing agent today.