Life throws curveballs, both good and bad, and sometimes we need to move on relatively short notice when we're just not willing to sell our home. Have you been transferred to a different city? Are you temporarily moving to help a relative? Maybe you've decided to spend more time at your vacation home. Whatever the reason, there's no point letting your house sit vacant when you can turn it into a source of income.
But I need to be on the road in less than a month! There's way too much to do to get my house rented.
That's not true. If you break the process into manageable steps, you can find the perfect tenant and prep your home while you're packing up your own belongings and preparing for your move. So break out the wall calendar, your calculator, and a sharpened pencil; it's time to get that baby rented out!
- Check With Your HOA & Local Ordinances: The first thing you need to do before you go any further is to make sure it's legal to rent your home. Believe it or not, some areas won't let you!
- Learn Housing Laws: Read up on local, state, and national fair housing laws to comply with standards that prevent discrimination.
- Research the Market: Do you know what comparable homes in your area are renting for? Will your neighborhood and geographic location suit your ideal tenants? Find out which variables determine your home's rent potential.
- Determine Monthly Upkeep & Expenses: Before you settle on a price, be sure you've crunched the numbers. Which utilities will you cover? What are your annual expenses, spread out over 12 months? Do you have an insurance policy appropriate to a rental property? And don't forget... taxes, your time, and any fees for backup property managers.
- Set Up Your Accounting System: If you don't already have a separate bank account for your rental property, open one now. Try out VerticalRent's Online Rent Collection tool to streamline your bookkeeping and add convenience to your tenant's experience.
- Shop for Maintenance Professionals & Stand-In Representatives: It's a good idea to work with one or two professionals in each trade in case you need to make emergency repairs or conduct upgrade projects. You'll also want to designate a proxy should you be out of town when you're physically needed to visit the property.
- Set Your Price & Deposit: Now that you know what you need to charge to make all this effort worthwhile, you'll want to decide how much deposit you'll require. What's your insurance deductible? What's the value of your home's fixtures, cosmetic surfaces, and appliances? Consider all these factors before you come up with a deposit amount... and think of how much you'll increase it if you'll consider renting to pet owners.
- Choose a Contract Template: Find a contract that suits your particular needs, and type up any riders to customize your agreement. Be ready to further adjust your contract if the tenant has special improvement requests.
- Advertise! Forget the newspaper. Your tenants are shopping online for their new rentals. VerticalRent's Listing Management Tool lets you create visually stunning digital ads and manage your listing across a number of platforms, including Zillow, Trulia, and HotPads. As a bonus, your prospects can apply online, saving a LOT of time. Don't forget to post your ad on Craigslist, and consider distributing flyers on local commercial campuses and in neighborhoods where your ideal tenants work and play.
- Review Applications: Do you have more leads than you expected, thanks to our listing management tool? Have a look at your growing stack of tenant applications and choose your top three or four candidates. Discard the definite "no's" but set aside the rest, just in case.
- Host a Not-So-Open House: Your best candidates will want to check out your rental before they get serious. Choose a weekend date and invite them to staggered appointments so you can meet your potential tenants and let them tour the property. If you leave time later in the day, schedule and advertise an "open" open house to attract more leads.
- Conduct Interviews: Whether you want to set up your interviews on the day of your open house or after you've had a chance to further narrow down the field, you'll want to start the interview process as soon as possible. It's important to sit down with your candidates without distractions and get a feel for how well they present themselves. Only then are you ready to move on with the rest of the screening process.
- Run Background Checks: Be sure to examine your candidates' credit reports, eviction history, and criminal background. Need we say more? No, because VerticalRent's features speak for themselves!
- Contact References: Call each and every contact provided to obtain references from employers, personal connections, and former landlords. Keep an ear out for "inflated" references, and certainly follow up any answers given with hesitation.
- Negotiate Lease Terms: Have you selected—and cleared—the best potential renter? Do you want to ensure they stick around for your desired tenancy period or are you worried they'll decline if you plan to take possession in less than a couple years? This is when you and your future tenant can fine-tune your agreement and negotiate any "deal sweeteners" to make it a win-win arrangement.
- Estimate Tenant Improvements & Upgrades: Before you agree to install wiring for a tenant's hot tub or replace that brand-new carpet with laminate to accommodate a tenant's allergies, find out how much it will cost and whether you can afford it. Only then can you confidently move on to the next step.
- Finalize & Sign Lease: Once all parties are in agreement, it's time to sign that lease! You don't even have to set up an appointment; you can handle the paperwork online with a secure document signature program. Don't forget to verify that the tenant has renter's insurance before you finish the transaction.
- Confirm Receipt of Deposit: One reason why electronic banking is so helpful? You don't have to wait for out-of-state checks to clear. In any case, you want to make sure to at least collect and verify your tenant's deposit before you turn over the keys. Be sure to provide a receipt, and start counting interest from this date.
- Begin Tenant Improvements: Be sure you have a contractor ready (or already working), and a completion timeline in place. Assuming these upgrades are at the request of your tenant, they should be cooperative; however, be respectful of their privacy and reduce their inconvenience during the process.
- Move-In Walkthrough/Key Exchange: On the first day the lease goes into effect, walk through the home (their home now!) and thoroughly document its move-in condition. A smart tenant will take their own notes and photographs, and it's okay to combine your records in order to be on the same page. Speaking of pages, you'll want both parties to sign off on the checklist, and you'll want to keep track of the inspection documents to make the move-out process run smoothly.
- Deposit First Month's Rent: Congratulations! You made it! Now, don't spend that money all at once. Build up an emergency fund and set aside some money each month to cover turnover and repair costs. But if you're a smart landlord, you'll avoid most financial pitfalls, and you'll get to enjoy your income as you see fit!
If you're still getting used to the "landlord" title, we get it. Many homeowners find themselves diving into the role for any number of reasons, but fortunately, you have a wealth of tools at your disposal. Join VerticalRent to access tenant screening resources, rental applications and contracts, marketing strategies, and more. Think of us as your virtual property management assistant, and start thinking of yourself as a rental property entrepreneur!