You have just purchased and now you want to make money from your investment, congratulations, you have upgrade to be a landlord! But, how do you go about it? You might thinking what you should start with?
Sure, renting out a home can make you headache, but there may still be good reasons to stick that “For Rent” sign in your front yard. Here, we grant you a full step-by-step guide into the necessary things you must do to get you rental up and running. Be sure to go through all the steps carefully to avoid any trouble in the future:
Renovate Your House
Some basic renovations are always necessary for any new house, especially installing fans, lights and other basic fixtures. For added security, you may want to install window and door grills. The more renovations you perform in order to add comfort or increase the aesthetic appeal of a house will garner you a higher rental rate.
Check Local Rents
Do you know how much other houses are going for in your area? Is it important to do the research to see how much you can reasonably charge for rent based on your zip code, and local rates.
Promote Your House By Yourself Or Hire A Aeal Estate Manager
You can create an ads for your rental in your local news paper, but it would be costly. Alternatively, you can publicize the rental ads on social media such as Facebook, and its cost free! When creating your ads, be specific about the house; pictures will get you more response than text only. Oh yes, if your house has perks such as a pool or hot tub, make sure you have included them in your ads if tenants will have access.
Besides, should you hiring a real estate agent to publicize and find tenants for your house will definitely save you a lot of time and effort. It will also lend a more professional air to the entire process. However, it will cost you a bit of money, usually one month’s rental, to hire an agent.
Personally Interview Applicants
Once you start receiving the calls about your rental ads, it’s up to you whether personally interview each applicant. During the interview, ask them about the employment or student status and also their living habits (e.g., he/she is smoker or they have a pet to live with them). If possible, do check with their past landlords to see if they paid rent on time, and if they left their apartment in good condition.
Draw Up a Tenancy Agreement
Once you have found a tenant you like and trust, it’s tine to get down to the legal bits. Create a rental agreement, which both of you sign, that details the particular details of your living arrangement. However, you will have to specify the period of agreement and other details like how much deposit needs to be paid (usually one month’s advance rental, one full month’s rental as deposit and one month’s rental as utilities deposit. All in all, three month’s rental). All these details need to be worked out, and discussed, before your tenant moves in. Also take a look at the Landlord and Tenant Act for your particular state to see what rights you and your tenant have in the arrangement.
Stamp the Agreement
In order for the tenancy agreement to take effect, you have to get it stamped at the Land office and pay a stamping fee. For rentals below RM2400, there is no stamping fee required. However, for rental rates above RM2,400, the stamps cost (for every excess of RM240)
- RM1 for 1 year or less
- RM2 for 1-3 years
- RM3 for 3 years or more
Your duties are not over as you are required to pay the quit rent, maintenance fee (if any), assessment fee and various other costs that come with owning a piece of property. Don’t forget to check with your tenant occasionally to see what thing needs improvement or fixing.
Have you ever rented out a room in your home? What was the experience like? If not, would you ever consider doing so?