Before I was able to sell my house in Maine, I was forced to rent it for 4.5 years. I was not going to sell it for less than I owed. There can be tax benefits to renting a property, check with your accountant. This page is an attempt to enable you to learn from my experiences.
You can boil down renting property into the following items:
Learn all you can about the subject. The web has a number of resources, perhaps the most useful is Nolo, the Nolo legal self help publishing company. They publish a book, The Landlord's Legal Guide which is absolutely indespensible. Buy a copy, it (probably) is tax deductible. It will become your bible. Nolo also has a number of other books of interest to the new landlord. You should definitely check them out.
I won't bore you by listing the pointers in the Nolo book, but much of what I learned about being a landlord was contained in that book.
How do you attract potential renters? Word of mouth is a great way, but that may not be feasible. You can use an agent, but I don't think a months rent is worth it. The best way? Advertise in your local paper. Most folks looking for a place to live will use the local classifieds. Don't bother with any other mechanism (Internet is probably the only alternative, and it just isn't worth it at this point).
Picking a person to live in your property is the key to being successful. There is no surefire way to pick a "good" tenant. What, you ask, is a good tenant? I would say the landlords goals are the following (in no particular order):
A great way to find out if a prospective tenant is going to pay their rent on time is to run a credit check. It never ceases to amaze me how many landlords don't spend the $20 to find out if this person is going to pay their rent on time!
The other consideration is you want someone who is going to care for your property. How do you do this? About the only way is to ask for references, especially from the previous landlord. This is by no means a surefire way to figure out if they are going to care for your property, but it is about the only way to do it.
So how do you decide which prospect to rent to? Create a scoring system. I used financial basis as my criteria, in other words, the one who had the highest ability to pay was my first choice. And, remarkably, these people end up being the ones who will take the best care of your property too! It is illegal to discriminate on any basis, except for: pets, smokers, and obviously, ability to pay (unless your property is in some rent restricted class; if so, my condolences).
One note on month to month vs fixed term leases. Most people don't realize this, but a fixed term locks in the landlord much more than it does the tenant. They can leave, but it is impossible for you to ask your tenants to leave. So in most cases (even in the northern climates, where people don't like to move in the winter) it is better for the agreement to be month to month. That way, you as the landlord can give your tenant notice and not have to put up with 6 months of late rent payments, or worse (court).
This is the most important aspect of the job, clear and open communications. If you are straightforward with your tenant, they will (at least, will be more likely to) be straightforward with you. Give them 60 days notice instead of 30 days notice, that sort of thing. A little good will goes a long way.
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