Tips on Renting Out Your Home

If you are trying to sell your home and you're not having any luck, you might be considering the option of renting your home out; the question is should you, or shouldn't you? A good tenant can be an absolute blessing, however a bad tenant can be a nightmare come true. So how can you tell the difference? What should you consider first?

The question is: to rent, or not to rent? What kinds of things should you be aware of before you rent your home out?

This is a great question because so many people are changing directions as a result of the market out there right now. There are a lot of things to remember when renting your property. I want to hit on a few topics because I have rental property myself and nobody ever told me these things; these are things I had to learn the hard way myself.

One thing you definitely want to know is the person's credit rating. However, more important than their credit rating is knowing how they pay their rent. You know, things can happen to good people so don't be as hung up on the credit rating as much as you pay attention to their rental history; are they making that rental payment a priority?

Something that I learned the hard way is that while it is important to ask the current landlord for a reference, it is far more important to ask the prior landlord. The reason for that is because if the person is a bad tenant, unfortunately sometimes their current landlord will tell you whatever you want to hear in order to get rid of them. Whereas the prior landlord will tell you the truth because they don't have anything to lose; that was a hard lesson to learn.

When taking applications should you require some sort of application fee, and if so how much?

Yes, you really should collect an application fee because a lot of times that fee will bring these sorts of issues out to the surface right off the bat. A lot of times when people ask, "Is there an application fee?" they're really just asking if you're going to dig any further and for $25-$35 you can do a complete search on someone.

What about pets? How should you handle that topic?

Typically a $150 pet deposit is taken, but another thing I've learned the hard way, is that it is more important to keep the tenant's attention. I have found that charging a $500-$1000 refundable pet deposit will help them remember to get up in the morning and let Fido out, rather than sleeping in and it not being a bid deal. If they're going to get some money back in the end, they are more conscious about the issue.

Should you collect the first and last month's rent with the last month's rent being the deposit? Or should you charge a separate security deposit?

Again, what I've learned the hard way is that you should never let the security deposit be that last month's rent. If someone trashes your house, and you use up all that money for repairs, you have no more leverage; there's no recourse. So always keep that deposit something separate; that's never to be used as rent, it's always a separate security deposit.

Is there anything else you can do to ensure that a good tenant is indeed found?

One trick I've learned over the years is to charge a little bit less than what the going rent might be; you'll have more people to pick from which will allow you to be a little more selective in your tenant choice. Another thing is to make sure that they always have a reference with the utility companies. Utility companies know how the game is played and unfortunately there are people out there who will play the game; the utility companies are on top of it. If a person does not have a utility record,then they are probably not going to be a good tenant.