If you are an investor who has just entered the real estate market, there are chances at some point you will consider renting out your property. You may buy another property to rent out, or some may start by renting their home.
Renting out the home you currently are living in provides an additional source of income. It also lays the foundation skills that you will need when you hop to larger real estate investment in the future.
Also, finding cheap houses for rent in Corpus Christi is difficult. So when you set the rent price for your property, set it right. It can be tricky if you are not careful. Therefore, we have listed the top things you need to consider before renting out a house.
In-depth research on your local market
Before you list your home for rent in Corpus Christi, TX for investment purposes, you need to learn the dynamics of the local rental market here. Consider your rental as a business and make the process of understanding the local market as researching your customers. Know about who your competitors are and what they are offering currently.
Following are the things that you should find out –
- Who are the renters in your neighborhood?
- Are there more renters than rentals?
- What is the average rent for a home like yours?
- Are there any specific events, businesses, or any areas in high demand for rentals?
- How much is the makeup of existing rentals?
- What type of rentals are available – apartments, houses, or condos?
- What amenities are offered by these rentals?
- What is the expectation of the potential tenants?
Analyzing the market thoroughly will give you a clear understanding of your potential customers. You will also get a fair idea about the type of houses or accommodations they are looking for and what needs your rental can meet.
Define your rental well
The next step when planning to list homes for rent is to define your home. Determine what type of rental you can offer. Infinite ways can be used to generate income from your home. You can either rent out your entire home or an entire guest house. If you have multiple bedrooms, you can rent that out to individuals or you can also offer them co-living. In certain cases, you can even rent out your garage.
Deciding on the lease term is important too. You will want to determine whether you are willing to rent your home for a year-long lease or a short-term rental on a month-to-month basis.
Depending on your desired and targeted renter, you will want to define what amenities and accommodations your home will provide – appliances, furniture, AC or Smart TV, etc.
This is an important step because, in cities like Corpus Christi, where there is little to no housing and higher rental demands, you can list houses in Corpus Christi for rent at a considerable price and provide only the bare-bone amenities. On the other hand, if your home is in a suburban area, to entice potential tenants, you should consider offering a fully furnished rental.
Be informed about the local laws
Real estate is a heavily regulated industry. So, before you list homes for rent, know what laws will be applied to that. There can be federal, state, county, city, and even local regulations that will outline your rights and obligations as a landlord. The rights of your tenants, applicants, and also the standard procedures for handling the security deposits will be considered.
If your home is a single-family residence, then you must confirm with your local planning and building department whether the property can be rented out or not. Certain jurisdictions may require the property to be inspected and registered before soliciting renters.
Abiding by the law is careful because the last thing you want is to rent out your property, and find out later that you have broken the law and are now liable.
Check-in with your accountant
Before renting out your home, consult with your tax advisor. This has to be done if you are converting your personal property into an investment property, due to significant tax consequences. The biggest example of this is – if you convert your personal property to a rental property, you may lose the ability to not pay capital gains tax when you sell the property.
Everybody’s situation will be different, so it is wise to sit with your accountant to gain a full and personalized picture of what you need to be aware of tax-wise.
Jot down the numbers
To become a financially successful investor, you need to assess how much it will cost you to run your home as a rental. So, analyze the numbers behind your business and then move forward. Calculate all the expenses that come with renting out your homes like repairs, maintenance, insurance, property management fees, vacancy allowances, credit and background check fees, property taxes, and income taxes.
Once you know the entire cost structure, you immediately get a fair idea of the minimum starting point. This way, you can determine your rental charges. If your rental price is higher than the other rental prices of your neighborhood, you need to redefine what your rental product will be.
Lastly, sitting down and jotting the numbers serves as an important tool to monitor your investment and ensure it is in profit.
Hire a property management company
If this is your first time renting out your house, then you must consider hiring a property management company. By hiring a property manager, you can fully focus on your full-time job or other responsibilities and spend quality time with your friends and family. Incorporating them in your rental business will elevate it to a successful passive income investment.
Market your listing well
Increase the visibility of your listing by marketing it well. Take the help of your trusted realtor in Corpus Christi. They have access to the internal marketing sites. They will help you market your property well to attract potential tenants
Draft the Lease Agreement
Once you have found a potential tenant for your rental, be sure to draft a lease agreement prior hand. In real estate, anything in writing is considered gold. No matter if you pull out your agreement from the web or use the one your property management company provides you, take the time to read it thoroughly.
Make sure that it outlines the following pointers –
- The monthly rental amount.
- The term of the lease whether it is on a month-to-month basis or fixed basis.
- The repairs and maintenance that you as a landlord will be responsible for.
- The repairs and maintenance your tenant will be responsible for.
- Pet policies.
- Cause of eviction.
- Notice requirements for late rent payment, entry, and termination.
- Prohibiting illegal activities.
If anything goes wrong, the judge will look at what was written in the agreement, making it compulsory to make sure you are protected.
Final word
As you probably know now, what things should be considered before renting out a house, you are now all set to begin your investment journey. The process may seem scary at first – becoming a landlord, interviewing the potential tenants, taking responsibility for other people’s actions, etc. But, in the long run, you are paving a path for yourself for financial independence and wealth generation.
To begin your process, consider working with reputed agents from The Grahambelle Group in Corpus Christi. You can contact them anytime to get started immediately.
So, what are you waiting for? Get renting now!
