Encuesta

¿Sabe usted cuál es la diferencia entre un banco y una cooperativa de ahorro y crédito?

Si
No

familia
Spanish

¿Está preparado para rentar su Propiedad?

Do you Have what it Takes to Be a Landlord? 

by Antonia Wang

What would you do if you had to move and the prospects for selling your house seemed low? Maybe you don't even want to try to sell now because house prices are still low in your market.

One way out of this dilemma could be to rent out your home for a while until you can sell it for a decent price. But before you stick a "for rent" sign in your front lawn, you have many factors to weigh.

Are you ready for it?

First, recognize that renting out your home is an emotional issue, not just a financial one. If this was the first home you purchased, it represents an important part of your life. You may worry that renters won't take proper care of it.

In addition to the emotional factor, there are legal considerations, says Janet Portman, a real estate attorney and author of "First-Time Landlord: Renting Out a Single-Family Home."

One of the biggest mistakes homeowners-turned-landlords make is "they think, 'It's my property; I'll make the rules,' " Portman explains. The reality is that federal, state, and in some cases, local laws set parameters for what landlords and tenants can do.

If you're going to become a landlord, you have to be ready to think like a landlord, not a homeowner. "This is a business now," she emphasizes.

Think like a landlord

Becoming a landlord amounts to an additional job. You'll have to advertise and screen tenants. You'll need to have the skills and time to do repairs and maintenance. Even if you hire people to do the work, you're still in charge. "You're the one who will get the call on a Sunday morning that the toilet is plugged," Portman notes.

One way to handle the time-consuming and bothersome aspects of being a landlord is to hire a property management company to take care of not only repairs and maintenance, but also advertising, screening tenants, negotiating leases, collecting rent money, dealing with problem tenants, and so on. To find a management company, ask other landlords for recommendations. The National Association of Residential Property Managers, headquartered in Chesapeake, VA can also help.

What should you charge for rent?

You will want to charge at least enough to cover your monthly mortgage payment in addition to enough to cover maintenance, repairs, landlord insurance, and vacancy periods when they earn no rental income, etc.

You'll also need to charge a competitive rent for your area. Look at rental rates on craigslist.org. Another online source is rentometer.com, which not only shows going rates, but also has renters' comments about properties.

Do your homework

Before you rent out your home, research:

  • Federal, state, and local laws - You must follow laws during the whole process, from selecting tenants, to the lease you use, to handling security deposits, to maintaining the property, to evicting tenants. The U.S. Department of Housing and Urban Development and the Landlord Protection Agency are just two of many sources for information on laws.
  • Lender's rights - Your home loan may state that your house is "owner-occupied", so contact your mortgage lender. The terms of your loan may or may not change. The lender might add a rider saying that, if you default on your loan payments, the lender may have the option of collecting rent directly from your tenants.
  • Insurance - You may have to get new insurance, as your current homeowner's policy may not cover your house if you rent it out. This varies by company. Don't just assume your coverage will continue.
  • Tenants - Obtain a credit report for a prospective tenant, get employment history, and talk to current and former landlords.

For additional information on homeownership, visit your credit union.

Published 25-28-2012

 

Compártelo

Tu dirección electrónica

La dirección electrónica de ellos

Comentarios

Página

Cerrar

Envíanos Tus Comentarios

Tu Nombre

Correo Electrónico

Comentarios

¿Quieres que un representante de la credit union se ponga en contacto contigo?
Si No
Si tiene alguna pregunta sobre su cuenta o una transacción, por favor póngase en contacto con su credit union por teléfono en vez de usar esta forma.

Cerrar

RSS Compártelo Contáctanos