There are plenty of reasons that an individual may decide to convert their home into a rental property, rather than selling the home outright. In some situations, it may be possible that the home won’t sell for a price that will allow you to break even. In other situations, the property may have been an inheritance that the owner is reluctant to sell but could certainly leverage into extra income. Whatever the specific scenario, there are several things that you need to keep in mind when you convert your home into a rental property.
If you still have a mortgage, you will need to check the requirements on the mortgage. Many lenders require you to live in the property for 12 months before converting it to a rental property. If you don’t follow these requirements, they might call the loan in, which can result in foreclosure. You will also want to ensure that you will qualify for a new mortgage so that you will be able to buy another home to live in before you rent your current home out.
When you decide to rent out your property, it is crucial to change your insurance policy to a landlord policy. If you still have a homeowner’s policy, but you are renting out the property, it is very likely that your claims will be denied, which can put you in a difficult financial situation.
Preparing the Property
Just as you wouldn’t want to live in a run-down building, neither will your renters. Make all necessary repairs and ensure that the building is properly maintained. You may want to consider providing certain upgrades or adding a new coat of paint to the building. Clean the building thoroughly. Not only will this make the property more appealing to tenants, but it will also set a standard in which you expect the property to be returned.
Consider your Prices, Rules, and Policies
There are many considerations for landlords. Decide what your various rules and policies will be, such as whether you will allow pets, smoking, or other factors on the property. Check with the requirements in your area for rental properties to ensure that you are complying with all regulations. You will also need to set your rent price. Research the market thoroughly before setting rent.
It can be overwhelming for first-time landlords to convert their home into a rental property. Here at Keyrenter, we provide many services that can simplify the process. To learn more about converting your home into a rental property, contact our professionals at the Keyrenter in Napa Valley today!