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Rent Your Home: Make Extra Money by Renting Your Real Estate

Renting real estate is now a huge business, and a surge of new landlords have a lot to say about the perks. Whether you have a vacation home or would like to rent the home that you now live in, there's a lot of money to be made in the rental market. With the economy the way it is, more consumers are looking for rental properties and are hoping to find a good deal. Before you begin to rent your home, however, ask yourself a few questions:

  • •  Are you ready to deal, if needed, with out-of-control tenants?

  • •  Are you prepared for strangers to move into your home?

  • •  Are you able to confront potentially volatile situations that may occur?

If you've answered yes to all the above questions, then you're probably cut out to be a landlord. Renting your real estate and/or home would be one of the best options if you're moving and don't want to sell your existing house or you've inherited the home from someone else. Regardless of the situation, before renting your real estate, you now need to get the property up to code and ready for tenants.

Getting Your House Up to Code


If the real estate is already in good repair and is in a good location or neighborhood, then your home renovation checklist is now cut in half. However, you must approach renting your real estate as you would any start-up business. Don't think your tenants will not notice if you've been pinching pennies to get up to code in order to rent your home. Not only will they notice, but they will view the property and you, as the landlord, in a different light.

You might also consider bringing some professionals in; most likely, they can get the job done in half the time, and while it may be more expensive, outsourcing the work will save you time and much needed resources. Another major step in the process to rent your home is acquiring a landlord license or any applicable permits and registration documents; however, not all U.S. states require this, so it would be best to check within your particular county before renting your real estate.

Consider some other necessary items before you can list your home for rent:

  • •  Will you include any of the utility bills (water, gas, electric) in the price to rent your home?

  • •  Will you be able to perform regular lawn maintenance, or will you have to hire someone to do this?

  • •  Can you ensure that all fixtures and appliances are working on a regular basis, and, if not, can you or someone you hire come to fix the problem quickly?

Calculating Costs


In order to decide how much to charge tenants to rent your home, you'll need to create a detailed list of all possible charges and/or fees that could be incurred from renting your real estate. Compare similar properties in the area to determine how much to charge for the basic price to rent a home. If you're including water or trash pick-up as part of the utilities, add these costs in. Finally, consider the costs of mortgage payments, maintenance, repairs, or whatever else might come up into the cost of renting real estate. This final estimated price should be reasonable so that the property is able to be rented quickly. A high, unrealistic price to rent your home will probably not attract many takers.

You'll also need to create a payment schedule for the new tenants who rent your home. Generally, landlords require a deposit to ensure that renters will not completely destroy the property, and if they do, the landlord has some recourse in the situation. Let your tenants know that no situation permits the rent to be late, and if it is, you may have to impose a fee.

Don't Screen Potential Tenants - It's the Law


In most states, the law tends to be on the side of the renter. Under no circumstances can you screen potential tenants; it's illegal and certainly not the best way to approach this situation. You can, however, perform credit and background checks and make an informed decision before renting the real estate. But many experts in the financial industry agree that having perfect credit or even a completely spotless record is somewhat rare.

If you'd rather not use a professional to handle this job, instead create a cleverly crafted application for your potential tenants. Request previous landlords' names and contact information as well as references and address history. Then, verify this information before renting your real estate! Also, let renters know up front what you will and won't accept on the property - pets, painting, or whatever you deem appropriate. Finally, draft a set of rules for your tenants to follow and have it looked over by lawyer at the very least. Make sure you're covered in the case of a lawsuit.

The Final Step - List Your Home for Rent


Getting your house up to code (and up to the letter of the law) may seem initially overwhelming. But it's possible to make some money renting real estate that you never use or a vacation home you rarely visit. By taking the time to ensure maximum happiness of your tenants (should you decide to rent your home), you will find yourself with a little extra cash flow that wasn't there before.

About the Author


Woody Alpern, a certified public accountant, is the founder and creator of WhyBuy.com, a website that lets users search for rental listings online. The site has many categories from which to choose, including vacation homes, furniture, office space, and apartments for rent online. With both a bachelor's and master's degree in accounting from the University of South Carolina and a founding partner in four firms, Alpern is an expert in his field. He can regularly be heard on financial radio shows discussing real estate investing, pension planning, and administration. To begin using this service, visit www.whybuy.com.