Considering renting your property out? There are a few things you need to consider before you do. Here are some things to check before you list your home or apartment for rent.
Before you rent your home out to tenants, there are a few things to consider. In addition to rental rates, deciding who covers utilities, insurance implications, and lease terms, there are other things you need to be aware of that aren’t as obvious. Make sure you have your bases covered with these five important things to research before you rent out your home.
1. Clear your plans with your HOA (if you have one).
If you live in a community that has a homeowners association (HOA), there may be provisions against renting out your house. Arguably, you should be able to do what you want with your own property, but if you own a home with an HOA, you’ve agreed to follow their rules, which can be very strict. If you are allowed to have renters, they will still have to follow HOA guidelines for maintenance, noise, and other rules. That’s important to note, because you want to make sure your tenants follow the requirements or you’ll be stuck facing fines.
Read your bylaws carefully and ask the HOA any questions that you’re not clear on. Once you have an agreement with your tenant, you need to honor that and you don’t want the HOA making it difficult for you to do that properly. Clarification is the best choice when working with an HOA and its rules and regulations.
2. Check any city regulations on landlords.
When you rent out your house, you’ve technically gone into business for yourself. As a landlord, you may be considered a business and regulated by the city. Not every city or municipal area has regulations for landlords, but it’s always a good idea to find that out before you decide to rent out your home.
There may be city zoning requirements or ordinances that you have to follow for a rental that weren’t issues for a homeowner. That’s very important to note, and something you want to think about carefully so you aren’t putting your financial future at risk. You could face fines and other problems if you’re supposed to be following city zoning laws and fail to do so. Be sure to check your city and county website for any landlord ordinances.
3. Determine zoning regulations on occupancy limits.
One of the zoning regulations your rental may have is the number of people who can legally live there. For example, many locations require that you have one bedroom for every two people living in the rental, with the exception of children under two. So a married couple with a new baby could rent a one-bedroom home, but a married couple with a five-year-old child would legally have to rent something with two bedrooms or more.
Keep these occupancy limits in mind before you rent, and make sure you’re following the laws and requirements carefully. If you aren’t sure or don’t understand something, check your city and county website out before you find a tenant, so you don’t have to worry about it later.
4. Know if your tenants will run a home business, and if that affects zoning.
Having a home-based business can easily run you afoul of zoning requirements. A property that’s zoned residential isn’t going to work for a business in most cases, but it also depends on the business. Someone who uses their computer to make money and handles all of their business activity online or over the phone is far different from a person who is selling products and has a sign out front.
Be sure you know what your tenants do for a living, and that they understand what types of business activities they can and can’t perform from their rental home. Even though they would be the ones at fault, as the owner of the property it would be up to you to correct the zoning violation. That’s easily avoided by putting home business information into the contract, so you reduce your risk of having a zoning problem caused by a tenant.
5. Determine a pet policy and your due diligence.
In using your house as a rental, you open yourself up to both risk and reward. You can make money, but you can also lose money. If you can’t keep the place rented, or you have to pay fines or even fight a lawsuit for something your tenants have done, it can quickly make your rental an unprofitable venture.
Therefore, it’s critical to know relevant information about your tenants before they move in. If they have pets, especially dogs, you want to know that up front. Many landlords have a no pet policy, because it reduces their liability a great deal. If you do agree to let your tenant have dogs, make sure you know how many and what breeds. Get the information in writing and consider taking a pet deposit and charging additional rent as a part of the contract. If the tenant lies about the number or breeds of dogs, you have some recourse in case they attack someone or cause damage to communal property by having everything documented.
Since zoning regulations can be different if you’re renting as opposed to living on the property, you want to check into them carefully before you make any decisions about your property. That way you’ll know exactly what to require of your tenants and what to put into your contract to make sure you stay on the right side of all zoning laws.