Looking to set your Fairhope property up to rent?
If you are, that move can be highly lucrative. The potential passive income from your rental property can help you boost your savings or pay down the mortgage.
That said, being a successful landlord takes more than just renting out your property. Just like any other investment, you’ll need to get certain things right.
At the Level Property Management Group, we believe renting out your house is a great way to secure passive income. So here are the basic steps of turning your home into an investment property.
Know Your Responsibilities
Being a landlord comes with many responsibilities. For one, it’ll be your responsibility to market the property in order to find a tenant. This can prove to be extremely daunting during a down market or in a competitive area.
Another responsibility you’ll have is tenant selection. Of course, you’ll want to rent to a high quality tenant that pays rent on time, notifies you of maintenance issues, and abides by all policies. As such, you’ll need to have a proper tenant selection mechanism in place.
Other responsibilities include:
- Collecting rent
- Drafting a lease agreement
- Evicting a tenant
- Setting a rental price
- Maintaining the property
Observe Landlord-Tenant Laws
Landlords have to abide by a number of laws in order to not violate their lease. One example of such a law is the Fair Housing Act. As per the act, landlords are required to treat their tenants fairly on the basis of certain protected classes.
The following are protected classes under the Alabama Fair Housing Act: race, color, religion, nationality, familial status, sex, and disability.
Another legal responsibility you have is in regard to landlord entry. For all non-emergency situations, you must provide your tenant with 2 days’ advance written notice. The only time you’d not require providing your tenant with advance notice is during an emergency or under court orders.
There are also the security deposit laws that you must abide by. These outline the rules that landlords must abide by when asking for a security deposit from tenants. For instance, in Alabama, the most you can ask as a security deposit is the equivalent of one month’s rent.
Prepare the Home
Quality tenants tend to rent homes that are also of a high quality. No quality tenant will rent a home that has leaky faucets, that’s unclean, or generally uncared for.
To get your home ready for occupation, you should do the following things to make it desirable to prospects.
- Give it a thorough cleaning.
- Spruce up the curb appeal.
- Repaint tired looking walls.
- Give it an upgrade.
- Replace old, inefficient appliances with new ones.
Market the Property
At this point, you’re now ready to start marketing the property. So, identify what makes the property stand out and then begin drafting a quality rental ad. A good rental ad is one that contains a captivating headline, a proper property description, and quality photos.
Next, start the distribution process. Distribute the ad as extensively as you possibly can. Use a combination of platforms for the best results. Such as, social media, rental listing sites, yard signs, flyers and posters, and community bulletin boards.
Price the Property Correctly
Before you begin listing the property, know how much you’re going to rent out the property for. The right rental price will help you attract the right tenants all while ensuring you make a good return on your investment.
The best way to determine the rental price is to hire a professional, especially if you’re just starting out. A good property management company will have the experience and resources to conduct a thorough market analysis.
Screen All Prospects
Don’t just rent to any tenant that shows interest in renting your Fairhope property. Start the pre-screening process immediately if a prospect contacts you. Find out when and why they are moving, what they do for a living, what they earn, how many people will be living with them, etc.
Next, schedule a property showing with the tenants who pass the pre-screening process. After this process, require the interested prospects to fill out an application form and then verify their information. The verification should entail calling prior landlords and current employers and running background checks.
Hire a Property Management Company
Many different responsibilities go into renting out a home in Fairhope. You need to know how to market it effectively, screen prospective tenants, collect rent on a consistent basis, and repair and maintain it, among other things.
If you’re just starting out, these responsibilities may become stressful and possibly overwhelming. Ultimately, you may find yourself running into losses.
When hiring a property management company, you achieve stress-free property management experience. You’ll no longer have to worry about filling vacancies, finding tenants, evictions, rent collection, responding to maintenance issues, or even staying compliant with applicable laws.
Now you know how to rent out your house in Fairhope. But as you can see, it isn’t exactly an easy process. It is a multi-process that has to be done right. If you’re just starting out, or have a full-time job, or are expanding your investment portfolio, hiring a property management professional might be the most ideal situation for you.
Speaking of a professional, Level Property Management Group can help. We can help you handle all aspects of managing your rental property. We have been in business for over 15 years and are committed to helping you achieve your goals. Get in touch to learn more today!
Disclaimer: This blog should not be used as a substitute for legal advice from a licensed attorney in your state. Laws change, and this post might not be updated at the time of your reading. Please contact us for any questions you have in regard to this content or any other aspect of your property management needs.