How do i make my home into a rental house?

Question

I want to make my current home into a rental property after we move.

Answer 1

I've rented for a few years.

First think you should do is talk to your local housing authority and see if they have any booklets on the laws regarding rentals in your area. These booklets will allow you to tailor your rental to the area. They should also note the rules regarding lead paint notifications.
Next you'll need to learn the difference between a lease and a rental agreement. copies of both standard forms are availiable at any stationary store. When you fill out the forms use the legal discription of the property, and spell out all your rules eg. no cats, clean yard, pay water bill. If it's not on the lease/rental agr. it's not legally binding. Verbal agreements are almost impossible to enforce. You can also include addendums to the lease like a crime/drug free addendum that says they agree not to do/sell anything illegal. Everything needs to be written on paper, keep a copy for yourself and a copy for your tennants. Also, when your tennants sign the lease, it needs to be done infront of a notary. (avail free at banks etc.)

Talk to your insurance guys, Rentals use a "landlords protector policy" you'll want to make a not on the lease/rental agr to recommand the tennant carry "Rentors Insurance" and suggest your agent (a lot of times you can get a discount for referring people)

Once all that's done, look in the paper for rentals in your area and go see a couple, then base your rental rate on what you see compared to your place. Make sure you have all your neighbor's phone numbers. Put an ad in the paper and describe not only the house, but the area it's in. Make sure you have tennants fill out Rental applications (INCLUDING SS and License #'s and references, and CHECK them, because you'll want to know who you're letting in your place. history is good)

Regarding picking up rent, either they can mail it or you can pick it up or they can deposit it into an account at the bank. Keep this separate and write reciepts. Have a late pmt policy 5 days grace or something and STICK to it. have the 3 day notice to terminate lease/rental agr. ready, and if they don't pay, then ask for the $, if they don't have it, you can work w/ them, but give them the 3 day notice. , if 3 days go by, then give a 7 day notice to vacate. you don't want deadbeat rentors. if they still don't pay, then $50 will get the Sheriff to "Move them".

There's a lot to it, and right up front, I'll tell you that people will screw up your house, but EVERYTHING you spend on it from the point you decide to rent is TAX DEDUCTIBLE. So save all reciepts, even gas for while your'e driving to/from the place.

There's so much more than I can write here, but talk to other people in your area that rent places, and see what you can learn. Good luck with it.

Answer 2

2

Answer 3

If you want your current home to become a rental property, simply find a tenant that is willing to take over your mortgage, insurance, and taxes paid monthly, and write up a lease agreement to your liking, specifying the length of the lease, the price, and so on. For more information regarding lease agreements, visit http://www.spoa.com, the Small Property Owners of America Web site.

Do take extreme care in picking the right tenants, as you don't want to get in over your head with two mortgage payments if things go wrong. And you definitely do not want to foreclose on any of your properties.

Do realize that this is similar to starting your own business. You will be accountable for anything that goes wrong, and you will need to treat your tenants with respect, charge a fair rent, and respond to any of their needs, even if it's in the middle of the night! However, you can hire a property manager to do all of this for you if you simply don't want to deal with it, or if your new home is out of the area. The only downside is that it will eat into your profits.

So to sum it up, do your research, see what the current rents are for the area, and see if it makes sense financially. Screen, screen, screen your tenants, and understand this is to be approached as a business. Decide upfront how long you plan to rent out your property. The choices you make now will reduce stress and headaches later down the road.

For more information, check out:

http://www.thetruthaboutmortgage.com

Answer 4

Not sure if this would help. Usually, a housing market correction last for years. It is unlikely things will brighten up in a few months, afterall, this bubble took 5 years for form.

It might be better to give some discount so you unload the house quickly and can use the gain of the home to make money elsewhere quickly. At the same time, you will save money by not paying mortgage for the next 5 months.

For example, if mortgage is $2500/mo. and you have $300,000 gain sitting in the house, by selling it now rather than 5 months later will save you $12500. It will also earn you as much as $7000 from interests (Assuming CD are paying 5.5% or higher).

Total financial benefit for selling early would be $20,000. I would give buyer some discount just because of that.

Finally, keeping a house in selling condition is a lot of work. If your realtor does staging, it costs extra to rent furnitures. If you are living in the unit, it takes extra effort to keep it clean. So, sell it fast!


http://money.cnn.com/2006/09/08/real_estate/caught_in_the_bubble/index.htm?postversion=2006090814
http://money.cnn.com/2006/09/05/real_estate/Ofheo_home_prices/index.htm?postversion=2006090514

Answer 5

You should find out about how to manage a rental property or hire a property manager.

RentalPropertyManagement Yahoo! Group

http://finance.groups.yahoo.com/group/RentalPropertyManagement/join

Answer 6

find a good lease. make sure you're not in violation of any deed restriction. Don't rent out your house if you're moving out of town...it's too much of a hassle to manage.

Answer 7

Rent-To-Own Home : http://RentToOwnHome.uzaev.com/?XCHs