Renting out a property that was once your own home can be a lucrative and financially rewarding experience, especially if holding onto this investment is part of your long-term financial plan. It can also be a challenge, however, especially if you’ve never been a landlord before and you’re struggling to treat the property less as a home and more like an income-producing investment.
We’ve identified six common mistakes that we often see when homeowners are renting out their Monroe homes. Here’s what they are, and how you can avoid them.
1. Leaving Personal Property Behind
You might think you’re being helpful by leaving a lawnmower in the yard or some small appliances in the kitchen. However, this is rarely a good idea. Tenants want to move their own possessions into their new home, and it might be difficult for them to imagine living there if they walk in during a showing and pieces of your own life are still scattered around the property. There’s also a liability issue. If that lawnmower causes harm, you could be looking at a lawsuit.
Clean everything out of the property before you rent it out. Appliances should always be left in place, but that’s it. Take away the furniture, the toaster, the linens.
2. Forgetting to Change Insurance Policies
A landlord policy operates similarly to a homeowner’s policy, but there are nuances that separate the two. Don’t keep your homeowner’s policy in place; you could find that claims are denied once you mention the involvement of tenants or rental income.
Talk to your insurance agent and make sure you have enough coverage as a landlord. You’ll want more liability protection and extra insurance against things like loss of rent. Your tenant’s belongings won’t be covered under your insurance, so we strongly advise you to require renter’s insurance.
3. Maintaining an Emotional Connection to the Home
You need to treat the property like a business, which means all decisions have to be business-based and not emotionally driven. Make sure you can do this before you decide to rent out your home. If you have special feelings about who should live there or you’re obsessive about the garden, you might have some trouble disconnecting from the property.
Focus on the income the investment will provide. Be objective and professional and work with a professional Monroe property manager so there’s some distance between you and the tenant and you and the property.
4. Not Understanding Fair Housing Laws
The quickest way to find yourself in legal trouble when renting out a property is to violate fair housing laws. The federal Fair Housing Act is pretty easy to understand, but you also have to educate yourself on the state and local laws as well. You may not think you’re discriminating, but if you market your home as great for families or you think a specific gender, age, or race would do well in the neighborhood, you’re going to find yourself making some expensive legal mistakes. This is especially important when you’re marketing the home and screening tenants. Know the law or hire someone else who knows the law.
5. Responding Slowly to Maintenance
When we’re maintaining the homes that we live in ourselves, we can take our time fixing things and attending to maintenance items. This is not the case when the home becomes a rental. You’ll have to respond quickly and completely when a repair request comes in.
Make sure you have a great team of vendors and contractors ready to help you. Have an emergency plan in place in case the tenants call to report a fire, flood, or other catastrophe.
6. Neglecting to Hire a Monroe Property Manager
Renting out a home in Monroe seems easy enough. You find a tenant and collect rent.
It’s slightly more complicated, and working with a professional property manager will be the best decision you ever made. Don’t make the mistake of going it alone. Even if you love DIY projects around the house – leasing, managing, and maintaining a rental home is a lot different. Your property manager will know the laws, the requirements, and the best ways to ensure a successful and profitable investment experience.