Choosing to lease out your home instead of selling it, can be a smart financial move. By leasing out your home, you avoid the expenses associated with selling a home like commissions and closing costs. Plus, because you retain ownership of the property, you will continue to benefit from any appreciation in property value. Rental properties can also generate ongoing cash flow, making them great investments to build wealth. Let’s explore how to create a low risk rental income stream.
Securing quality tenants for your rental properties is one of the best ways to minimize risk as a landlord. A thorough screening process should include a background check, credit check, and employment verification. You can also ask for references with previous landlords to get a sense of how the tenant was in the past. Screen potential tenants carefully and establish a good working relationship with your renters. This can help ensure that your property stays in good condition and that you have minimal issues with late rent payments or property damage.
Clear Lease and Rental Terms
It’s important to set clear expectations with your tenants from the outset. Create a lease that is specific for your property and desired terms. At a minimum, this should include the rent amount, due date, and consequences for late payments. You should also outline any restrictions on the property, such as whether pets are allowed or smoking is prohibited. Additional things like quiet hours or which party is responsible for smaller property maintenance like mowing the yard, replacing light bulbs and A/C filters, etc., can also be helpful. By setting clear expectations from the beginning, you can avoid misunderstandings and potential conflicts down the road.
Keeping your property in good condition is important for attracting quality tenants, but it can also reduce your risk as a landlord. Regular maintenance and repairs can prevent small problems from becoming big ones. Responding quickly to any maintenance or repair requests, helps to ensure that your property remains safe and habitable for your tenants. This can also help keep quality tenants by showing them that you care about the property and their personal well-being.
Work with a Property Management Company
The easiest way to set up a low risk rental income stream is to work with a quality property management company. We do all the heavy lifting for you! At HuntAHome.com we are a full service property management company that does everything from screen tenants to property renovations.
Here are just some of the services we offer:
- Brokerage Services – acquisitions, leasing and property management.
- Tenant screening & placement
- Property repairs, maintenance, & rehabs
- Financial Accounting
- Direct Deposits
- Carpet removal and replacement
- Painting the interior and exterior
- Electrical system work
- Roof repairs
- And much more!
Leasing out your home can be a great way to diversify your investment portfolio. Real estate can provide a stable source of passive income, as well as a hedge against inflation. Rental income can be a great way to build long-term wealth through property appreciation, while also generating ongoing cash flow. Before you decide to sell your home, consider what you may gain from leasing your property out.
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