So, you can’t sell your house and you think renting it out would be a good way to cover the mortgage payment while you wait for the market to come back from the dead. Maybe you’re right. Just make sure you know what you’re getting into.
The Whidbey News-Times just ran an article on the perils that may await you. They titled it “Rental Nightmares“. Here’s an excerpt.
Renting out one’s property can be a positive experience, ultimately building equity for the owner and providing cash flow. It can also be a doomed game of craps.
Before you take the plunge, do some basic analysis. Too many first time landlords figure that there’s a big payday in renting. Very often there’s not. Be sure you consider all your costs, including the costs of taxes, fees, renting out the property, maintaining it, and the costs of any potential legal action, including eviction.
If you still want to go ahead, I suggest you use a property manager. First time landlords often try to manage their property themselves, sometimes from a distance. That’s usually a bad idea.
A good local property manager can help you make sure that things are done right and that your property is looked after. They have experience in all the things you’ll need to learn about. Here are some of those things.
You need a solid, enforceable rental agreement or lease. It must conform to local laws.
You need a process for attracting, screening, and selecting tenants. It should include both a criminal background check and a credit check. Most of the time you can charge a fee to cover your costs. But you have to follow the rules.
You need to prepare your property for occupancy. This involves cleaning and it may also involve changes in service for utilities and other services.
You need a process to remove a tenant who violates your rental agreement or lease. That means that you need to identify violations and then follow the correct legal procedures.
Remember, you’re risking what is probably the biggest asset you have. Be thoughtful, careful, and prudent. And do things right. Sometimes the best way to do that is to hire professional help in the form of a property management company.