Becoming a landlord is rarely a decision that’s made in an instant, but for accidental landlords, it often feels that way. Whether you’ve inherited a property, moved but decided to keep your home, or are navigating unique financial circumstances, renting out your property can be a fantastic way to generate income. However, it also comes with challenges that first-time landlords must consider.
Here’s everything you should know before renting out your home to make this endeavor as smooth and successful as possible.
Pricing Your Rental Competitively is Important
Knowing how much to charge for rent can feel overwhelming, but it’s crucial to get it right. Too high, and you might struggle to attract tenants. Too low, and you could leave money on the table or not cover maintenance or mortgage costs. Research comparable rentals in your area to determine a fair and competitive rental price. And don’t forget to factor in additional costs like property taxes, insurance, and upkeep when calculating your rental price. We recommend accessing reliable and helpful data from a local property management company.
Prepare Your Property for Tenants
Your home may have been perfect for your family, but is it ready for paying tenants? Take the time to make necessary repairs, replace worn-out fixtures, and ensure the property is both safe and appealing. Remember, small upgrades like a fresh coat of paint or updated appliances can help attract better tenants.
Ensure your property meets safety standards, including functioning smoke alarms, secure locks, and proper lighting.
Understand Your Financial Obligations
Renting out your property isn’t as simple as finding a tenant and collecting rent every month. You’ll need to factor in property maintenance costs, landlord insurance, tax considerations, and sometimes even homeowners’ association fees. There may be vacancies, where you’re not earning any income but you still have to pay for landscaping and utilities and upkeep.
Rental income is taxable, but expenses related to your property, like repairs, insurance, and property management fees, may be deductible. Speak with a tax professional to understand your obligations and benefits.
Work with a Property Manager
Managing a rental property yourself can be time-consuming and stressful, particularly if you’re balancing a career and family obligations or living far from the property. Property management companies can help handle everything from tenant communication to maintenance requests and legal compliance. You can be a landlord without being a hands-on landlord. A property manager not only saves time but also ensures your investment property is handled by expert professionals.
Plan for the Unexpected
Being a landlord comes with its share of unpredictability. From sudden repair costs to tenant disputes or even vacancies, it’s essential to have an emergency fund for unplanned expenses. Keep at least 3 to 6 months of expenses saved up to weather unexpected challenges without financial strain.
Becoming an accidental landlord doesn’t have to feel overwhelming. By educating yourself, staying organized, and seeking professional help when needed, you can turn your rental property into a steady and rewarding income source.
Let us help you. We work with new landlords all the time, and we can provide the support and resources that make all the difference in your success. Please contact us at Oceans Managing Group by calling (386) 255-8585, or visit www.oceanspropertymanagement.com.
