First time landlords are becoming quite common in the apartment rental business. The economic downturn and challenging real estate market have forced many condo owners that are unable to sell their units to reluctantly lease them until the market improves. So what should a novice landlord know before entering the rental business? The following are a few steps to help you rent your condo and generate rental income.
The first step is to determine how much rent to ask for. While it seems logical to ask for enough to cover your costs plus a little extra, that may not always work. Rents are actually determined by the market. Start by researching what other comparable units are currently renting for in your building. Features like hardwood floors, updated kitchens/baths, views, building amenities and outdoor space all command a higher rent. The bad news is that the current market rent may not be enough to cover your mortgage, taxes and assessments at first.
Next, come up with a good marketing strategy. Take professional looking photos, write a good description highlighting all the features and post it on as many apartment rental sites in your area as possible. Many of these sites are free but you generally get what you pay for and beware of scams. Also, keep in mind that thousands of ads are being posted every few seconds on craigslist so how likely is it that a viable renter will spot yours? These are both good reasons for listing your condo with a reputable rental agency. While paying a commission may be hard to swallow, it is better than letting your unit sit vacant for two or three months.
Once you have found someone interested in renting your apartment it is important to thoroughly check them out before entering into a lease. I would highly recommend using a real estate professional for this part of the process. It is important to check their credit, employment and rental history and to understand your rights and obligations according to the lease. For instance, who pays the utilities and repairs? Make sure your tenants understand the building rules and regulations. Remember, you will be charged for any violations that your tenants incur.
Overall, the rental business can be quite overwhelming, especially for the first time landlord, but with the proper resources it can be very profitable.
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