You are the owner of a condo, which you have been living in for some time, but now for one reason or another, you have decided to move and want to turn your condo into a rental apartment. Becoming a landlord is a new experience that requires you to be diligent during the rental process so you can find a good renter and receive a cash flow to pay for the property's expenses, while continuing to protect your investment. You don't want to let just anybody move into your condo, as there can be a risk of damage to your condo and non-payment of rent requiring you to pay for a legal eviction. Here are two tips to help you successfully rent out your condo.
Consider the Unit's Expenses
One of the first steps you need to take in advertising your condo as a rental is figure out the rental rates in your area and how much the property's expenses are to make sure the rent will cover the property's costs. You don't want to end up paying money each month out of your own pocket to cover the property's mortgage and other expenses.
Do some research on condos in the community and nearby and on similar apartments for rent to find out what they are renting for. You can complete your search online with property management companies or by looking on a rental app or website and calling on rental signs in your neighborhood. Record your findings so you can analyze the figures and set a fair rental price for your condo.
Next, calculate all the condo's expenses by adding up things like your mortgage payment including property taxes and home owner's insurance, and water, sewer, and garbage pick-up costs. Then calculate the unit's HOA fee, if there is one, and any regular maintenance you have on the property. This may include an annual furnace or air conditioner tune-up, interior paint, and other repairs. All these costs should be easily covered by the rent you are planning to charge, with some extra left over to pay for unexpected costs and your time in managing the property.
Screen All Applicants
Once you have put your property up for rent and have an interested party wanting to rent your condo, take the next steps in the application process. Have them fill out a rental application, being sure to get their personal information, including their full name, Social Security number, date of birth, addresses for the past couple years, and employment information.
Be sure the application informs them you will be reviewing their credit report and running a background check during the process. Their signature on the application gives you authorization to get this information online through one of the three credit bureaus. Charge them an application fee, which will cover the cost of ordering their credit report and background check. The cost of requesting these reports can vary: for example, one credit bureau charges $30 for a combined check.
Once you have requested their credit and background information, you can review the details contained in them. Take this opportunity to look for any negative information to help you make an informed decision on whether to rent your condo to them or not.
An applicant's credit report will include details of any bankruptcy they filed, a home foreclosure, account charged-off, or an eviction within the last 7 to 10 years. If they owe unpaid rent to a prior landlord, it will show on their credit report in this section. You will also be able to look at their payment history on their credit cards, loans, and other credit accounts to see if they have a history of paying items late. On the applicant's background check, you can check for any criminal records.Share