How to Set Up Your Home to be a Rental Property

[Music] hi I'm Katie from redfin today we're going to discuss how to set up your home to be a rental property renting your home instead of listing it on the real estate market is a common and even profitable way to hold on to your home when you're not currently living in it as your primary residence some homeowners choose to do this while they're waiting to sell until their home's value increases or the market turns in their favor others may hold on to the property for retirement or for their family's future use whatever your reason for deciding to rent your property some planning and preparation will need to go into your home not to mention your new role as landlord before you start advertising to the world the first decision to determine is whether you want a long-term rental as in offering your tenants year-long leases or a short-term rental and listing your property on Airbnb or VRBO this guide will walk you through setting up your house as a short-term or long-term rental how to find out how much to rent your house for knowing your legal rights and responsibilities putting on your landlord hat and pros and cons of short term versus long term renting setting up your house as a rental whether you're setting up your home to be a long term or short term rental you'll need to be sure that it's ready for your renters to move into either way you'll want to double-check to make sure that all appliances are safe and in working order entry to the house whether by key or lock pad is secure and accessible the house is clean and if furnished the furniture is not broken or damaged and in good condition if you're renting your house for short periods on a site like Airbnb you'll want to take the time to set up your profile correctly you'll need to include information like your home type and how many people your space can accommodate if you allow children and pets and if there are any additional fees for them an overview of your home and the area nearby along with highlighting any amenities that guests can expect to enjoy when they stay in your house how much to rent your house for when renting out your house you'll need to understand how much rent to charge to make sure you're covering all of your costs mortgage property taxes insurance utilities and be able to set aside some funds to put toward maintenance and upkeep you'll also need to cover costs associated with rental applications like conducting background and credit score checks on tenants as well as hiring cleaning services a property manager and contacting referrals once you determine a price that fits your needs you'll need to search and compare two rental homes of a same or similar quality in your area this is the same for both short-term and long-term rentals Redfin has a rental estimate that can help you determine what to rent your home for when getting your business and finances in order to list your home as a short-term rental you'll want to do your research on Airbnb or VRBO to see the price range that other homes in your area rent for consider offering a discount for extended stays also consider increasing the rent on weekends holidays and other high travel seasons factor in cleaning costs pet deposits and other upfront non-refundable fees and protect yourself and your property with insurance when organizing your finances in business to offer your home is a long-term rental you'll want to determine the length of the lease you'll offer set a price for security pet and other deposits consider hiring a rental manager such as a property management company to handle rent and late fee collection take care of repairs and deal with vacancies and evictions protect yourself and your property with insurance list your home on applicable rental sites such as Craigslist Facebook etc once you've settled and secured the business aspects you'll want to speak to a lawyer or a real estate company to make sure you not only understand your legal responsibilities but you have them all covered know your legal rights and responsibilities the essential contract for a long-term rental is a lease agreement as a landlord you'll want to make sure that all terms of the rental situation are lined on paper and signed by all parties involved you want to make sure your lease includes the following length of lease security deposit amount rental due date and penalties for late or missed payments responsibilities for repairs basic upkeep and maintenance be sure to be specific about lawn care and pest control list of names of all tenants policies about pets painting noise levels homeowners association dues and rules and smoking all related deposits eviction terms consequences for damaging the property when thinking about the length of lease keep in mind that month-to-month gives you more flexibility to sell when you're ready while an annual lease is a more stable option for those holding onto the property either way you'll want to have a lawyer look over your lease to make sure you've included all of the necessary components you'll also need to research Landlord and Tenant law in your state when it comes to disputes some states automatically favor the kenan over the landlord so it's important to know the laws rules and regulation in your specific state when it comes to short-term rentals signing the lease usually isn't involved but you still need to make sure your renters understand and follow your policies so be specific about your cancellation policy adding additional guests steps for cleanup and check-out and any rules around amenities like a hot tub swimming pool and kitchens put on your landlord hat when you decide to rent out your home you need to be sure to separate yourself emotionally from your renters while it's important to be flexible while you can you need to remember that this is a business a good landlord is firm but kind understanding but not easily taken advantage of other qualities of a good landlord include good communication and quick response times reliable and responsible and always acts honestly and with integrity well-organized and thorough paying close attention to detail utilizing and developing all of these qualities will let you establish a strong cordial and candid landlord-tenant relationship pros and cons of short-term versus long-term renting there are many reasons to rent out your property but deciding how to rent it out can be just as challenging as deciding who to rent it to how do you know which is the best choice for you short term rental pros more lucrative especially if you live in a tourist destination adjustable in regard to time and money in order to fit the demand flexible with scheduling so you can use the property for vacation when you have the time possible qualification for tax breaks and deductions that are specific to short-term rentals like the 14-day rule generally less wear and tear on your property short-term rental cons necessary to furnish and clean on a frequent regular schedule some states cities or municipalities require short-term rental landlords to complete complex paperwork and hike a mountain of red tape accounting for negative financial gains during slower periods more competition from surrounding properties typically more tasks and items to manage long-term rental pros more stable and reliable tenants with less rental turnover more consistent pay in income fewer bills that need to be covered by the landlord generally does not need to be furnished long-term rental cons potentially larger gaps between tenants less control over the property finding the right tenants may take time the eviction process can be time-consuming and costly you won't find a one-size-fits-all package when it's time to decide on a short-term or long-term rental plan the benefits and shortcomings associated with both are clear it's important to always keep your goal in sight maximizing your property's return on investment thank you so much for watching our video we hope you found it helpful and you can always go to red friend comm for more resources

Channel: Redfin

Views: 24,733

Rating: 4.9201775 out of 5

Keywords: renting, property management, rental property, real estate investment, passive income, renting a house, how to rent out a house, investing in real estate, how to invest in real estate, real estate, real estate investing, Is Renting Out My House A Good Idea?, Redfin, redfin real estate, redfin brokerage, renting home, rent home, real estate investing for beginners, real estate investing 101, rental property investing, income property, rental properties

Id: yTcsYdyT2lU

Length: 8min 45sec (525 seconds)

Published: Fri Oct 25 2019