Being a landlord can be beneficial to your bottom line. You may be able, for example, to use the monthly passive income to pay any mortgage you may have.
To successfully rent out your Montgomery house, however, you have to do it right. Being a landlord isn’t exactly a walk in the park; there are a ton of aspects involved. How successful you are depends on how you manage those elements.
To help you in your pursuit of being a landlord, in this article, we’ll share 7 tips on how to rent out your house in Montgomery, Alabama!
1. Know Whether You’re up to the Task
As already mentioned, being a landlord isn’t a simple endeavor. It’s a responsibility that requires you to have certain skills and experience. So, if you’re just starting out, self-managing your property is something you might want to reconsider.
The following are some questions that can help you gauge your landlord expertise:
- Do I know how to find quality tenants?
- Will I have the time to manage the day-to-day activities of being a landlord?
- Do I have a good understanding of the Alabama landlord-tenant laws?
- Do I know how to determine the rental price?
- How will maintenance tasks be handled?
How you answered those questions can help you know whether or not you’re cut out to be a landlord.
If you answered yes, then you can probably give it a try. But if you answered no to some or all of them, then hiring an expert like Southern Realm Property Management is the way to go.
2. Draft a Lease Agreement
Have rules in place that your tenants are required to follow. For example:
- Rules on subletting. If you’ll allow it, then make sure to be clear on the requirements the tenant must meet. For instance, require them to seek your approval before subletting. And if you don’t allow it, then make sure to clearly state it on the lease agreement
- Rules on pets. America is a nation of pet lovers. As a matter of fact, 70% of Americans have pets, according to a survey done by the American Pet Products Association (APPA). If you accept these tenants, be sure to have conditions for their pets
- Rules on property alterations. Will you allow your tenants to make changes or improvements to their rented unit? If so, have them follow certain requirements. For example, they must ask for your approval and pay a certain fee
In addition, a good lease agreement is also one that mentions certain key elements such as:
- The rent and security deposit amount
- Each party’s responsibilities
- Occupancy limits
A quick online search will yield thousands of free templates you can use to draw up your own lease agreement. However, that will only be half the story. Once you’re done, you’ll also want a professional to give it a keen eye to ensure it’s legal.
3. Get the Home Ready for Renters
Tenants can be picky when it comes to selecting a home to rent. In a down market, for instance, prospects have a lot to choose from. This is usually a bad thing for landlords. That’s because increased options mean higher expectations.
In such a case, you’ll need to do everything possible to ensure your property stands out from the competition. So, what exactly makes a home rent-ready? This is relative to the condition of a specific home.
But, generally speaking, ensure the home:
- Is exceptionally clean
- Has all appliances working as they should
- Has working electrical, plumbing, and ventilation systems
4. Determine the Right Rental Rate
This is also another aspect of making a home ready to rent. When determining how much rent to charge tenants, you should consider the home’s value. According to the 1% Rule, the monthly rent should be equivalent to about 1% of the home’s value.
So, let’s suppose your home is valued at $200,000. Then, according to the 1% Rule, the home should rent out for about $2,000 every month.
5. Understand All Applicable Laws
Every state, including Alabama, has landlord-tenant laws in place. Landlords have a responsibility to abide by these laws.
Did you know, for example, that you require a notice to enter your tenant’s unit once they have moved in? According to the statewide tenancy laws, you must provide them a notice of at least 48 hours prior to entering their rented units.
Did you also know that there is a limit to how much security deposit you can charge your tenants? The maximum landlords can charge in the state is limited to the equivalent of one month’s rent.
Besides the landlord entry laws and security deposit rules, the following are other laws to familiarize yourself with:
- Eviction rules and procedures
- The residential lead-based paint hazard reduction act
- Mutual covenant of quiet enjoyment
- Implied warranty of habitability
- The Fair Credit Reporting act
- The Fair Housing act
6. Start Marketing Your Home
To successfully rent out your home, you’ll need a marketing strategy in place. But, first and foremost, picture the kind of tenant you want. Next, create a process to help you interest that kind of tenant.
Remember, prospective tenants have dozens of listing options to go through. As such, your goal should be to create a listing that stands out to increase click-through rates. The following are some of the things your listing should have:
- A catchy headline
- Good quality photos
- A comprehensive description of the property
- Rent and security deposit
- Utilities included
- Property amenities
- Your contact information
Remember, though, you’re not writing a novel. So, make it short, sweet, and to the point. What’s more, ensure that it complies with the Fair Housing laws.
7. Hire a Good Property Management Company
This is a great option if you’re overwhelmed by self-managing your property. A property manager is a professional who has the skills and experience to handle a rental property on behalf of the owner.
A good manager will help you find tenants, maintain the unit, collect rent, and handle all legal aspects. Southern Realm Property Management can do all this and more!
Renting out a property can be lucrative, but it sure comes with its own fair share of responsibilities. So, if you’re thinking of renting out your Montgomery house and lack the skills and experience, consider hiring a professional to help you manage it.
Contact Southern Realm Property Management today! We’d be happy to speak to you about our services.