Rules for renting

By Melissa Wirkus

Whether you have already moved to a new home, and haven’t quite sold your old one, or are just looking to generate some extra income for your second home, renting out a property can be a tremendous task to take-on.

At first glance, it seems as though renting out a property would be a guaranteed way to make some easy, hassle-free money, but there are a lot of strings attached that many people are not aware of until they give renting a try.

An October 8, 2006 article by Vivian S. Toy of The New York Times, “Ground Rules: Renting out your house,” looks at some important things to consider when renting out your home, condo or apartment.

“The most obvious benefit from renting out an otherwise unused house is the income, which can pay the mortgage and other bills. “I wouldn’t do it to make money necessarily, but to maintain my property and have my costs covered,” said Kathy Coleman, an agent at Coldwell Banker Doernberg in Scarsdale, N.Y.”

The first step in a smooth renting process is to hire a broker to help you find a tenant and make the overall process a lot smoother.

“But brokers can facilitate the process by helping set the rental price with up-to-date comparable rental information, by showing the house, by helping to screen prospective tenants and finally by helping to watch over the property while it is rented out.”

Brokers can even act as the property manager and make sure things are running smoothly if you are not in the near vicinity.

The next hurdle in the renting process is to find reliable tenants. This could very well be the hardest and most stressful part of the renting process.

“Any landlord’s greatest fear is a tenant who refuses to pay rent and who also refuses to leave, because the eviction process can be lengthy, litigious and expensive. Finding a reliable tenant is crucial.”

“Brokers typically run credit checks and ask for letters of reference from employers to screen potential tenants. Sometimes, they even ask for personal references. But you can also do all these things on your own.”

One you find responsible and worthy tenants, your next step in this process will be to negotiate a lease. It is important to consider even the most minor details when drafting this document.

“Standard blank leases can be had for just a few dollars at any office-supply store, but for peace of mind, you should add riders that spell out specific maintenance requirements or that list important pieces of furniture that have to be safeguarded. Adding a rider is as simple as typing or writing in a new item on a standard lease. You can hire a lawyer to review the lease, but even without a lawyer, it becomes a binding legal document once it is signed by both parties.”

Utilities and general maintenance are also important things to think about and they are often overlooked. Make sure you decide in advance about which party is paying the utilities, and ensure that general maintenance will be completed by a separate party or the property manager or broker.

Taking care of these things in advance will save you a lot of time and trouble in the long run.

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