The Checklist: What to Do When Renting Out Your Condo
You may have come across listings on sites like DDProperty offering deals when you rent a condo. This is a common activity for people that want to have additional sources of long-term income. Buying an apartment to rent it out is a smart choice since you are sure to have decades of active income from it. However, before you start renting out your unit, there are a few details that you need to be aware of so that your experience as a landlord will go smoothly.
Make Sure it is Properly Furnished
A lot of people tend to prefer a fully furnished condo over one that has barely any furnishings at all. Yes, it is an additional expense, but it does pay for itself since having furniture makes it more likely that people would inquire. You don’t really need that much to make a unit comfortable; a bed, a small dining table, a couch, a television and a cabinet or two is all you really need to state that the apartment is fully furnished. Just make sure that the furnishings you do choose are relatively durable so that they won’t easily be destroyed.
You need to set rules when it comes to what your tenants can do in the condo, without these rules in place, it is likely that they may engage in activities that could result in complaints from the your neighbors in the building. For example, to make extra money, some enterprising foreign workers tend to make meals that they would then sell to their fellow employees. Ordinarily this is not a problem; however, cooking that much food can put a significant amount of wear and tear on the kitchen appliances. There is also the smell of all that cooking to take into consideration. The other tenants on the same floor may start complaining about the smell and this could result in you having to deal with the admin of the building. Always set rules when it comes to what people can and cannot do within your unit to prevent such problems from causing you headaches in the future.
Investigate Your Tenants
Another important part of the checklist is to properly investigate your tenants. Yes, this may seem like a rather drastic step, but you need to make sure that they can either afford to stay in the condo or are here in the country legally. Illegal immigration is a serious concern and the penalties for harboring illegal immigrants have grown substantial over the past few years. You do not want to find yourself in a situation where you are subject to a police inquiry if the people that rented your unit utilized illegal means to enter into the country. Aside from this, there are also issue regarding the capability of a tenant in being able to afford the rent for the unit.
Yes, there are times when payments get delayed due to an assortment of issues, this happening once or twice is not unheard of. However, if it happens every single month, then this can be a considerable burden since you are relying on the income from the unit to pay for your own bills. To avoid this, you should always ask your tenant for proof of their employment and ask how much they earn per month. These may be prying questions, but they can help you determine if they can afford the monthly payments for the apartment.
Set a Competitive Price
You need to set a competitive price to entice people to rent your unit. The best way to find out how much people are renting their units for is to check via various online property listing services and see the various rental prices. You can set your price depending on how close you perceive your unit is to what other people are advertising. In fact, depending on the improvements or your desire to increase the likelihood of people inquiring, you can add or deduct ten percent of the monthly rental price.
Setup a Proper Payment System
Setting up a proper payment system is another important step that you need to take. Are you going to drop by the unit on a particular date in each month in order to collect rent or would you prefer post dated checks? Do you think that bank deposits would be easier or should the tenant use a money transfer service to send you the payment? There are a wide variety of different payment options that are available. When deciding on which one is best, choose the option that you are the most comfortable with since you will be using it for the next several years.
Being a new landlord can be a daunting experience; however, as long as you follow the details on this guide you can be well on your way towards becoming a great one.