Things You Should Know Before Renting Out Your Property

Before renting a property, review these important facts:

The decision to rent a property can oftentimes be a difficult decision. A homeowner may decide to rent his or her property to earn additional income. The owner may have experienced difficulty selling the property and is now considering renting it to avoid defaulting on the mortgage. For homeowners contemplating this move, there are important steps that need to be reviewed before advertising an apartment or house for rent.

– Know what the average rent price is for comparable properties in the area.

– Along with comparing this information to impending property costs, a homeowner will be able to determine a rental price attractive enough to secure a tenant, yet high enough to cover necessary obligations, such as mortgage payments.

– Decide on the method(s) that will be used to screen prospective tenants.

– A homeowner choosing to manage the property himself will need to research and select how prospective tenants will be screened for eligibility. If a property management company is chosen, they will manage the entire process.

– Determine if any repairs need to be made and if the property will receive any upgrades.

– It is imperative to take care of any needed repairs to protect the home’s value and present the homeowner as a responsible and reliable landlord. Upgrades to the property have a two-fold benefit: it can increase the chances of securing a tenant and it increases the chances for a higher rent to be charged.

– Contact the mortgage company to change the status of the property.

– A change in insurance coverage (rental-home insurance) will most likely be required by the mortgage company as well.

– Consult a tax professional to determine how to report rental income and related expenses on an individual income tax return.

– Items like insurance premiums and mortgage interest on the rented property could be eligible deductions.

– Determine how much to collect from a tenant upon moving into the property.

– Estimated costs of future repairs, maintenance, and other expenses will help determine how much to collect upfront (first and possibly last month’s rent, and security deposit).

– Decide how much flexibility (if any) a tenant will be allowed regarding cosmetic changes and/or upgrades to the property (painting, fixture replacements, etc.)

– Will a tenant be allowed to paint the white walls hunter green? How will the tenant be reimbursed if he makes an offer to install granite countertops or a high efficiency washer & dryer? These possibilities should be anticipated. Consider if permission will be granted to the tenant to make any changes.

For homeowners seriously considering becoming landlords, the most pertinent advice to follow is to be informed. Be informed of who is going to occupy the property. Be informed of a landlord’s rights and responsibilities, and that of a tenant. Most importantly, be informed on how to protect the investment. Following these steps will ensure a positive experience for both landlord and tenant.

Larry Lim writes on Malaysia property and real estate, particularly on Penang properties.

Larry Lim writes on property and real estate within the Southeast Asian region, as per professional advice from http://www.homeguru.com.my.

Author Bio: Larry Lim writes on Malaysia property and real estate, particularly on Penang properties.

Category: Real Estate
Keywords: malaysia property, malaysia properties, penang property, penang properties, malaysia real estate

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