Owning a rental property: What do you need to know?

x_157_81753_0_14042575_300You may be financially and emotionally ready to be a landlord, but that doesn’t necessarily mean you’re informed on all the ins and outs of owning your own rental property. If you’ve been wanting to rent your investment property out but were too embarrassed to ask about some of the basics, consider this your handy primer.

Why should I rent my investment property out?

Now that you’ve bought an investment property, in all likelihood you’ve got a sizable mortgage to pay off for it. This is alongside the home loan repayments you might already be making on the home you live in. The revenue stream that comes from letting tenants live in your property can help you pay down these debts quicker, as well as offset any repairs you have to make.

How do I advertise my property?

If you want to make sure you attract the best tenants from the widest possible range, work closely with your real estate agent. They’ll help you come up with a good marketing strategy for your property. You’ll also want to advertise across a range of different mediums – print, street signs, the internet, even word-of-mouth.

What’s the rent I should set?

When figuring out what to charge for rent, choose a figure similar to other rental properties in the area in order to be competitive. Also, look at properties similar to your own in terms of size, style and closeness to amenities. You don’t want to undercharge.

Your rent will also depend on the predominant type of resident in your area – young professionals can afford to pay more than students.

What should I look for when screening potential tenants?

Consider a number of different factors when reviewing a prospective tenant’s application:

  • how long did they live in the previous property? You’d hope for six months at the least
  • are they employed and do they have a steady source of income?
  • do they have any pets?
  • what do their referees say about them?

Such questions can help you decide if the applicant can afford the rent, how reliable they are and whether they’ll treat your property responsibly.

 Is there anything I should keep in mind?

Just bear in mind that every state has protections for tenants against unwarranted discrimination. Therefore, you can refuse someone tenancy if they have pets or are unsuitable, but you can’t do so on the basis of sex, race, disability, sexual orientation or age, to name a few.

How can a real estate agent help me?

If you work with the right real estate agent, they can take the lead in all of these steps, from giving you the information you need to set the right rent value to interviewing and screening clients. You will, of course, have the final say.

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