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do you know the things involved when you rent out your property?

Feb 28, 2008
If you're about to enter real estate investing and you've read materials about it, I'm sure you've heard about renting out your property as the best option to continuously receive monthly residual income. But what about other concerns when you rent out your property? Get to know them by taking some time to read this article.

If you have no previous experience, you need to know the cost involved in renting out a property. You have mortgage payment, property tax, insurance, and maintenance. In order for you to take home a positive return from the rent, you rent price needs to cover all these cost plus your markup for profit. If you have a lawn, add the cost to maintain this lawn to your maintenance cost also because your tenant will not pay for this.

Now your next dilemma is on how to determine the right rent price for your property. Unfortunately, you have to determine this on your own. But here are some of the main considerations when it comes to determining the rent price of your property.

The number one consideration is the demand for rental properties. If there's a high rental property demand in the area, you can demand a higher price for your property too. This is true when your property is near business establishment or near downtown. Base your price on the overall soundness of your property too. Renters are willing to pay higher price in exchange for safety.

Renters nowadays are more conscious about the health and safety issues involved in rental properties. To give your potential renters confidence to rent your house, have your property inspected by health and safety inspectors. Don't forget to obtain a certificate or a signed report from the inspectors that your property is fit to live in health and safety wise. This might come in handy when your tenant files a law suit citing health hazards in your property.

It also pays to know your rights and obligations as a landlord and the rights and obligations of your tenants too. Tenants nowadays are more aware about their rights and they know that they can sue you if they found a tint of hazard in your property. Protect yourself from these silly law suits but educating yourself about your own rights too while meeting your obligations as a landlord.

Your tenants could also be the cause of your bankruptcy. When you happen to rent out your property to people that careless about other people's property, this is not far from happening. Choose your tenants carefully, those that have conscience to protect your properties value and not leave it worthless. If there's a way for you to contact their previous landlords, by all means contact them and ask them about their experience with that particular tenant.

At the end of the day, if you plan to rent out your property, you must be prepared to become a landlord. You must know that being a landlord means to be on call 24/7 to take care of your tenant's house-related problems. Of course you can hire a property-management to take care of all these for you, but be prepared to pay them at least 10% of the monthly rent price of your property.
About the Author
Author Jack Cockrel is a real estate investor in Atlanta, GA. He has transacted more than 750 properties since 1996. For Real Estate Investing Tips get his Free Online Course Real Estate Investing Free Online Course.
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