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Becoming a landlord for the first time can be both an exciting and an intimidating experience. Whether you took the leap to try your hand in the income property business, or you’re moving and planning to rent your home to a new family, there’s a lot to consider. We’ve got you covered with some of the biggest tasks to check off your to-do list, so you can rake in the cash and not be surprised with trouble down the road.
Inspect your home.
It’s imperative you ensure the home you are renting out is livable for future tenants. According to the legal team at Nolo, almost all states require a landlord to provide a safe and livable home. Some of the basics include:
- A structurally sound home, with floors, stairs, walls and roof properly secured and intact.
- Safe operation of electrical, plumbing, heating, ventilating and air-conditioning system.
- Properly working water heater and heating system.
- A home void of environmental toxins including lead paint dust, asbestos and mold.
- Attention to and reduction of the threat of foreseeable criminal intrusions.
- Extermination of infestations of rodents and other vermin.
- This begins with a professional home inspection. While not required by law before renting out your home in all states.
“There are a couple of good reasons to hire a professional home inspector,” notes All Property Management. “First, few of us have specific knowledge of home construction materials, methods, and building codes, not to mention the experience to spot trouble from the smallest of indicators.
“Furthermore, professional home inspectors who are members of the American Society of Home Inspectors (ASHI), the National Society of Home Inspectors (NSHI), or the National Association of Home Inspectors (NAHI) generally carry errors & omissions insurance—a kind of malpractice insurance for professional services. If you are financially harmed because they overlook something they reasonably should have caught, their E&O insurance policy can protect you against financial damages. If you try to do it yourself, you get no such protection.”
Clean, paint and landscape.
It should go without saying that deep cleaning is an essential step before renting your home. Pay special attention to bathrooms and the kitchen, removing hard water stains, rust, wiping down cabinets and ensuring appliances are clean inside and out. “Keep in mind, renting a home with appliances may allow you to boost the rental price, but it can cost you if the appliances require frequent repairs or maintenance,” advises Tony Sena, the broker/owner of Shelter Realty, Inc. You should also deep clean the carpets, wipe down ceiling fans and baseboards and fix any holes in the walls. A fresh coat of paint to the entire interior is essential as well.
Change your insurance.
“Your homeowner’s policy isn’t enough to cover you when you become a landlord,” according to Gordon James Realty. Prior to signing a lease, it’s important you work with your insurance agent to obtain a landlord’s policy, which is called a dwelling policy.
Gordon James Realty also advises you research laws in your area, and obtain licenses and inspections needed prior to renting. “In most jurisdictions, being a landlord is considered a business that requires a license, even for a single property or basement unit.”
Have a firm lease.
An iron-clad lease ensures all sides are protected to avoid lawsuits. It outlines rights, rules and responsibilities for both you and the tenant(s). “A good lease agreement will specify the ways tenants can and cannot use the property, how many people can occupy the rental, what insurance is required, who is responsible for paying utilities, and what will happen if the tenant doesn’t uphold his or her obligations,” notes Renting My House. Especially when renting your home for the first time, consult a real estate lawyer to ensure your lease agreement is complete and legally binding.