Chances are you have heard horror tenant stories from your neighbors or friends about poor evictions and rental property destroyed. There might be dozens of reasons to avoid renting your property. But still…you may need to rent the property due to financial concerns. Or maybe you tried to sell the property, but it didn’t work?
If you have found your new home in the Multan city housing scheme then you ought to rent the previous property with minor and major upgrades so that the new tenants find it comforting. But how should you rent your old home?
In this blog, discover the incredible wealth-building opportunities you can enjoy because of the rental property.
So start with the basic question.
Is renting your house a good option?
To rent or to sell – are the two most important questions that will make your case here. One should rent a house because:
Rental property is an asset that transforms the liability into an expected benefit.
With time, the value of rental property increases and so will your profit. You can either rent the property for residential or commercial use.
It could also be the start of a new investment for you which means building wealth.
Find the prospective tenants for rent
How can you attract prospects to rent a property? Marketing is the key to luring and attracting the target audience with quality ads, highlighting the number of bedrooms or bathrooms, and so on. If you want to focus on the marketing side of the story, cover the 2 following ways:
- Craigslist – Find tenants online! It is free and you can place ads for rental submissions online
- Yard signs – another successful way to market the real state property is to place a banner that says “available for rent”. It will notify the instant someone is going by and sees the board.
Pre-screening rental applicants are good
So finally you have received multiple calls from a few prospective recipients. Now is the time to pre-screen them all in person. Set rental criteria and explain why it is important for you
You can add their gross monthly income, proof of employment, good references via former homeowners, the total number of occupants, and so on.
Creating a list helps you to shortlist the right tenant for your property. You can directly ask them if they are interested in answering these questions. If not, then why waste time at all?
Should you hire a property manager?
Usually, a property manager charges 10% of the monthly rent and 50% of the first month’s rent once a tenant moves in.
It sounds more like an ideal option because they cover the advertising, speeding up the process of rental applications, collecting the monthly rents, filing evictions, and so on.
So hiring a property manager might be in your best interest especially if you are going abroad and want to rent your property.
What is the ideal charge for rent?
It’s hard to decide the rent you want to charge. Usually, it depends on the market conditions. Your job is to determine the market rate and then compare that to the property’s location. Some locations are cheaper while others are expensive due to their high demand and availability of certain facilities.
Despite your best efforts, the property may not rent out as high as you might have expected. It could happen for a number of reasons. But the foremost reason is that you may have priced it too high for any tenant to rent.
Consider browsing through the local neighborhood and asking local landlords how much they charge for their rents. It will help you give some perspective.
Do you need a security deposit?
Consider a security deposit like a downpayment. It’s the lump sum amount paid in advance to ensure that tenants will fulfill the terms and conditions of the lease. Upon leaving the property, landlords, return the security deposit.
Usually, landlords charge a security deposit equivalent to the 3-month rent. But it’s not a hard and fast rule, some even charge a 2-month equivalent security deposit too. Plus, remember to keep that amount in a separate account so that it doesn’t get used.
Conclusion
Do not forget to check the backgrounds of the tenants. Before agreeing to hand over the property you should consider the above-mentioned factors to ensure the tenant is eligible and reliable. Also, verify their source of income to avoid any late rents. So if you are interested to rent out your old property it’s best to hire a professional consultant.
It’s hard to decide the rent you want to charge. Usually, it depends on the market conditions. Your job is to determine the market rate and then compare that to the property’s location. Some locations are cheaper while others are expensive due to their high demand and availability of certain facilities.