Rick Case Insurance Agency Blog
When moving to a new home, if your old house has a sentimental value to you, you may not have the heart to sell it away. Turning your home into a rental property is a great option, and you could earn more money than merely selling it. However, starting a rental business is not as easy as 1, 2, 3, as it requires a lot of documentation and legal processes, so here are the steps on turning your home into a rental business.
Know the tasks of being a landlord.
A landlord's work is never easy as you have to deal with emergencies for your tenants, maintenance, as well as dealing with unpleasant renters. Although rental income is genuinely a great source of additional cash flow, you must be willing to accept overdue rents at times.
Refinance your mortgage and update your insurance.
Primary residents have a lower mortgage and down payment, so discuss the terms with your lender first. Banks have ways to check your house, and violating the occupancy clause may result in mortgage due or fraud charges.
If you don't have insurance yet, you need to buy one to protect yourself from costly liabilities. Moreover, decide whether you need to switch your home insurance into landlord insurance for better coverage.
Determine how much you want to charge.
First, do some market research about the current rental rates. Then, ensure that you check the costs and have a reasonable profit for your property. If you feel lost, consult with a real estate agent to avoid mishaps, where he/she can also find tenants for you.
Set home rules.
This step is a must to maintain the cleanliness and orderliness inside your property, even if you are not physically there. Consider the occupancy capacity, pets, maintenance, garbage disposal and sanitization, and the right of entry for your tenants' visitors.
Create a tenant application form and start finding your tenants.
The tenant application form will serve as a screening for your potential tenants, which include necessary information about them. However, there are some questions that you cannot ask them, like race and religion, as per federal discrimination laws.
Although you might need to undergo a lot of processes, all work will be paid off once you start your rental business for real. Ensure to protect your home by purchasing home insurance.
At Rick Case Insurance Agency, we aim to provide comprehensive insurance policies that make your life easier. We want to help you get the insurance that fits your needs. You can get more information about our products and services by calling our agency at (405) 722-5556. Get your free quote today by CLICKING HERE.