Important Factors To Consider Before Finding A Tenant To Rent Your Old House
Let’s say you are looking to put your vacant property up for rent for the first time to generate passive income. While there are plenty of questions and doubts that may arise as you start researching the real estate market, there are some steps you’ll need to take before you even start screening potential tenants. If you’re unsure about where to start, we will share some important factors you need to consider before finding a tenant to rent your old house in the following guide.
Research the Current Demand for Rentals
One of the most crucial aspects of any real estate business is the property’s location. Not every area has the same rent demand, which may vary depending on variables like basic services, public transit availability, school districts, among others. As a real estate investor, the rental income you would be receiving from your old house set in a location with low demand won’t give you a significant return on investment. The property’s type and features will also determine how appealing it may seem to potential tenants and how you may be able to market it to possible renters. Before you continue with your endeavors, compare to other places and plan accordingly.
Evaluate Your House’ Appeal
If you’ve determined that the return of investment you’ll be receiving from renting your old home will yield positive results, you must conduct a real estate market analysis. With the information you gather, you’ll have a better understanding of the factors that make other rental properties in your area appealing to potential tenants, and create a listing of attractive features that will attract new tenants to yours. In a competitive real estate market like that of Texas, it’s best to work with a real estate advisor who’s well-versed in Texas property management to get more accurate results from your market analysis. In this stage, you’ll also have to evaluate your old house’s current state and determine whether any repairs are required.
Once you have a general view of the local scenario and consider your property’s type into the equation, you may have a better standing foot for contacting a rental property company and see the next steps to follow.
Figure out the Associated Costs
Contrary to popular belief, renting your second property doesn’t provide a lot of spare money to put into your savings account. Before placing your house for rent, you need to see the associated costs required throughout the process. Some real estate investors take this opportunity to look into several house renovations to add value to the property and ask for a higher rent price to pay off the upfront expenses. Expenses associated with property management and advertising are required to place your home out on the market, get people interested in it, and figure out how to pay taxes and get your home insured are some of the things you need to have in order before welcoming any tenants.
Get Acquainted with the Law
A vital aspect of renting out a house is complying with all housing laws applicable to your area. While federal laws are equal throughout the country, not all states and counties have the same regulations for landlords and tenants, so you must conduct the proper research on your rights and obligations as a real estate investor. As a baseline, you must have a clear understanding of the Residential Tenancy Act and how tenancy agreements to inspections, terminations, and rent collections details work. During tax season, keep at hand all relevant tax codes are associated with real estate investment properties to fill up all necessary information. And if you’re unsure of how to keep track of any taxes related to your property, it’s a great idea to consult a certified accountant on the matter.
If you’ve decided to look for a way to make money out of your vacant property, you can rent out your old home to earn a passive income. After you’ve contemplated all the factors involved in the process of preparing the property for rent, you must choose a licensed property management company that has experience running similar properties. That way, you’ll be at ease knowing that your property will be handled by professionals and will quickly and efficiently handle the tenants’ requests or complaints, collect the rent on time, and stay on top of the routine maintenance and emergency repairs. Interviewing potential tenants and doing thorough background checks may be an exhausting task, but you will soon see that it’s a necessary process to make sure your investment will pay off in the long run.
