Write an article based on this "Obtain insurance. Determine an appropriate rent. Market your rental property. Screen applicants. Draft a rental agreement."
Before you rent your property out to tenants, it is advisable that you get landlord's insurance. All of the major insurance providers offer this type of coverage under different names, but generally separate coverage into three categories, from the minimal DP-1 to the all-inclusive DP-3 (DP stands for "dwelling policy"). Most insurance professional recommend that landlords get DP-3 coverage to protect themselves from unexpected tenant behavior. This type of coverage generally provides replacement costs for losses, rather than cash value, which can be beneficial in the event of expensive damages. You should make sure that your coverage also includes general liability coverage. This provides coverage for any injuries sustained on your property. Experts advise that you get $1 million in liability coverage. The cost of landlord's policies depend on the location and size of the property. However, the average is about $800 to $1,200 per year. Talk with local real estate agents and research similar properties online in order to determine a reasonable rent amount. Make sure that, at minimum, your rent covers 110 percent of your mortgage payment on the property. The ten percent buffer can be used to cover maintenance, down time, and large repairs. Any amount you earn over that is profit. Start by listing your property on websites like Craigslist, Trulia, and Zillow. Make sure to include plenty of high-quality and well-lit pictures. Fill out the listing will as much information as you can. You can also purchase an advertisement in the newspaper, though this is expensive and may be ineffective. Finally, try placing a "for rent" sign in the front yard of the property. In all cases, provide a way for interested renters to contact you, either by phone or email. You will have to screen your potential tenants thoroughly for credit and criminal issues. It will cost you some money but will save you from potentially devastating losses. There are rental owners who don't do their due diligence and end up with scam artists who stop paying as soon as they have possession and do tremendous damage to the home. A bad tenant can end up costing you thousands in repairs, even if they do pay their rent on time. Look for applicants who are employed and make at least three times as much as the monthly rent. Reject any applicants with lengthy criminal records or those with credit scores under 650. Your specific requirements here depend on your risk tolerance and the strength of the market. Keep good tenants if you can by promising to keep rent steady or simply by providing excellent service. Find a rental agreement template online and use that to create your own with all of the relevant property details. You may also consider hiring a lawyer who has experience in the industry to make sure that your rental agreement doesn't leave anything out or include any strange provisions. The rental agreement should specify the rental period, the responsibilities of both you and the renters, and the security deposit. The security deposit is usually one month's rent, but may be subject to state or local limits.