Accidental Landlord: Renting Your Home

April 27, 2012 4:14:12 AM PDT
Many people are unable to sell, so they are forced to put their home/condo on the market for rental. Here are some tips on how to do it and avoid costly mistakes.

Price it according to the market, not according to your mortgage payment.

You might hope to recoup your entire mortgage payment via renting, but that may not be possible. Check what comparable rentals go for in your neighborhood and price yours accordingly, even if it means you still have to cover part of the mortgage (and property taxes) yourself.

Once it's on the market, make it available for renters to see.

Renters typically spend much less time house-hunting than buyers do. If one shows an interest in seeing your place, show it as soon as you can. Don't make them wait a day; they'll find another place. Be ready to show the place immediately.

If you've already moved out, move back in.

A home that is empty is as hard to rent as it is to sell. Put some of your old furniture in it, or consider borrowing or renting furniture so the place looks lived in.

Check the rules of your condo or homeowners association.

Many have limits on the number of rentals that are allowed in the building or association. If so, the HOA usually knows if the limit has been reached.

This is contentious right now, because a lot of HOAs are holding the line, while many owners may feel they have no choice but to rent their unsold home. Carefully verify what you'll need to account for.

This includes accounting for both rental income and deductions covering your maintenance and improvement expenses. There may also be depreciation-which can be very helpful now, because depreciation is based on what you paid for the property, not on current market value.

Check with an accountant and/or real estate attorney.

Get a good tenant.

You can't expect the place to look pristine after a tenant has lived there, but you can carefully screen for responsible people whose damage will be minimal. There will be some damage or wear, inevitably; count on that going in. Be a good landlord.

Fix anything that isn't in working order, and keep up on all maintenance. You want to keep up your investment in the asset until you can finally sell it.