What You Need To Know Before Renting Out Your Home
Renting out a home means allowing someone to stay in your house in return for payment. Before you rent out your house, you need to know a few things.
These things will help you avoid issues later in the future with your tenant. If you stay in Nigeria and probably own a house, you would notice that 89% of the time Landlords and Tenants always get into an argument.
Usually, this argument is about the rental fees, utility fees, notice to quit, and so on. Mostly in Nigeria, these arguments are related to high rent charges, poor facilities, utility charges, and sometimes invasion of privacy.
Some of these arguments have led to the loss of life, court cases, and sometimes some go spiritual. This is why it is advisable to have in mind things you should look out for before renting your house.
Things to Look Out For Before Renting Out Your House
Is your house in a tenantable condition? Can someone live in it comfortably without lacking the necessary things that come along with a house?
There are some landlords who put their house up for rent without making sure it’s in a good condition. You can’t just put your house on the market and expect someone to rent it if it is not tenantable.
Take a look at the plumbing system, make sure the electrical system isn’t faulty, check if the structure is stable, and look at the paint in each room, among other things.
When you are done with the basics, hire a real estate market analyst to have a look at the properties in your area and figure out the features that make them appealing to tenants. You will have to hire several contractors and spend some money if you want the house to do well in the market.
Note: Renting a home is a big decision, and you need to take a look around the place before renting it out. If you are unable to make a proper decision by yourself, then consider hiring someone.
One of the most critical factors to consider before renting out your place is the demand for real estate investment in the area your property is located.
This is vital, especially, if your main goal is to make a good deal of money from the property, and your primary source of income would be the room rent from tenants.
It will not be easy to find possible tenants for your place if the real estate pricing, is very high.
Moving into your first apartment is a decision that can be made after ensuring many aspects of comfort. Even if somehow you manage to get a lessee, they won’t pay much for the property, and it might not be sufficient enough as your only source of income. If the location is excellent, then there shouldn’t be any problems.
Marketing Your House
After you are done with all the necessary changes, take a look at the listings on various websites and figure out how they make a place look attractive to people and the words they use to describe different features.
Then make a list of all the various elements that make your property stand out. It will help if you are including any appliance or piece of furniture in the offer as well. Use rental terms to describe the extras your house has that most places might not, like a den, garage, separate laundry room, or chef’s kitchen.
This would help if you put up ads on different rental sites, also consider posting in the local newspapers. To further increase your chances of finding a tenant, contact a real estate agent. They help many property owners rent out their houses, for a commission.
You can also consider hiring a property management company to do all the work. However, they will take around 8% to 10% of the rent every month.
The Surrounding Laws
Do you know that as a landlord in Nigeria, the law allows you to sublet especially when the tenant is a reasonable and respectable person?
However, you have a right as a homeowner to not encourage subletting.
It is also best to have a basic understanding of everything that comes under tenancy agreements to inspections, rent collection, and recovery of premises. This can be a significant help in making sure everything is carried out legally.
You might also want to consult a certified public accountant to get information on the tax codes that are relevant to your property.
Finally, take a look at all the federal, state, and local housing laws before renting out your place.
Expenditures When Going Into Rental Investment
Even if you manage to convince the tenant to pay a good amount of money for the house, don’t expect to save much of it. It is imperative that you know about all the costs that are associated with renting a place before doing it.
Property management, advertising, taxes, and maintenance are just a few things that you will have to pay for as a landlord. If you conduct a real estate property analysis, it is also possible to know some of these costs.
One of the most challenging things is to decide what amount of money you can ask a potential tenant for rent. You can ask the owners of the houses around the area that are up for renting or are being rented and ask what they are charging.
Take all the costs into account before renting it out; this will help you decide whether it will have a better effect on your lifestyle or only cause stress and loss.
Having an excellent insurance policy in place can be very helpful in many cases, which is why it is essential. You might have had a homeowner’s policy that covered the damages, among other things, but you will require rental home insurance, for a landlord, to cover the property.
If you already have an insurance policy for the home, take a look at it to see if it covers you as a landlord as well. There is a very good chance that it might not be included in your current insurance, in which case you should look at different providers and see who offers the best policies.
As a landowner, your main reason to rent out a place is to make money. However, you need to figure out how to find tenants in advance. You will need to find appropriate websites to post ads on, or even try social media sites. If you are based in Houston. There are a lot of online platforms you can use to publicize your rental.
This way, it can reach your target market when people search for apartments for rent in Houston. Many professionals advise against renting out to friends or family members because it can lead to future problems.
Another thing you need to know is how to select the ideal tenant. You would want to carefully review each application, even if it is just one. You should conduct thorough research on their background by checking credit and criminal reports, as well as contact their references, like their previous landlords, employers, or any others.
You will be able to avoid risky tenants, which might cause damages or might not pay rent, by adequately screening them.
Writing A Lease For Renting
One of the final things that you will need to do before renting out your place is figure out how to write a good lease. It might be a fashion in your town to finalize deals with a handshake, but having it in writing is much better.
A proper contract will protect all your rights as a landlord, as well as the tenant’s rights and obligations as a renter.
A good lease should abide by fair housing as well as tenant, insurance, and rental laws in your local real estate market. Browsing samples on the internet might not be a good idea, because those laws might be for a different area.
It might be a good idea to consult a lawyer because these laws vary in every state. A lease should typically include some of the following things:
- Lease term (monthly, bi-monthly, semi-annual, or annual contract)
- Security deposit
- Rental due date
- Late penalties
- Repairs and who’s responsible for what
- Rules of behavior (including noise levels, neighborly conduct, and smoking)
- Pet policies
- Association rules
- Maintenance responsibilities (like lawn care)
- Eviction terms (such as damaging the property, using it for business, or not paying the rent)
There are many other things that you may need to include; these are just to guide. They can be instrumental in many cases.
Prepare For The Worst
If you decide to kick out a tenant for whatever reason, you will be lucky if they leave without creating a fuss. Many tenants are not good and will put up a fight. Just because it is your property doesn’t mean you can enter the house and throw out all of their belongings, which is a crime.
If the property is located in Ibeju Lekki, consider hiring a lawyer at Prince Joel & Associates to handle the case.
You can take the tenant the court and get them evicted, with a reputable attorney. The judge’s order will require them to leave the house, or the police will throw them out.