There are different reasons to turn your property into a rental. If the property has taken a long period without selling, you could still make money from renting it out. This is an option if you want to supplement your income without selling your home.
Regardless of your reason for turning your home into a rental property, you need to get it in order. There are several steps to follow that will help you prepare the property for the rental market. Alterra Realty Group shares ideas you can use to convert your home to a rental property.
Take Out Insurance
For your rental property, a homeowner’s insurance policy is not enough. When you allow people on your property, you take on some responsibility for their safety. For example, a tree could fall on the home, causing injuries to the tenants, or a gas leak could lead to an explosion.
If you’re renting out the property, you should think about insurance made for rental properties, which include coverage for damage and potential injuries to the occupants. In case something happens and you don’t have insurance, you will need to pay out of pocket, which may not be affordable. When getting insurance, choose one that combines liability and property insurance together.
Get the Required Permits
You need permits in some states to turn your home into a rental property. The permit is focused on safety, so an inspector will visit the home to ensure it meets safety requirements, including heating, electrical, and exits, to name a few.
Repairs and Upgrades
You also need to make repairs or upgrades to the property. This makes it appealing to tenants in the competitive housing market. The easiest and most cost-effective thing you can do is to clean and paint the home. Items that look dated should be replaced or repaired; change knobs and handles in the kitchen cabinets and faucets in the bathrooms. Just don’t go overboard, as you will need to factor in the cost of the upgrades in the rental rates.
Update Your Tax Approach
Before you get the property on the rental market, you need to update one more thing: your tax approach. While you may already be deducting mortgage interest from your annual tax returns, you will be eligible for other write-offs once you convert the home to a rental. Find an experienced accountant to take advantage of the different tax deduction opportunities that come from having your property on the market as a rental.
To enjoy more tax perks and other benefits, your business as an LLC. This gives you extra flexibility and can protect your assets. To set up your LLC in New York, you don’t need to incur a lot of fees as you can complete the process yourself or through a formation service. Check the regulations to know how to go about the process.
Get a Property Manager
While it’s possible to manage the property yourself, hiring someone with the expertise to do it for you can offer you incredible benefits. Being a landlord comes with many day-to-day headaches, so you can transfer that responsibility to a property manager if you have other things to do. A property management company can also assist with the legalities and vet tenants to ensure your property is occupied by trustworthy people.
Renting your property is a good way to make a living, especially if you own prime real estate. To convert your home into a money-making rental, begin planning ahead of time and bring in the pros to assist where they can. A home inspector, a formation service, and a property manager should help you get started smoothly. Let Alterra Realty Group’s professional resources help you through the process. Learn more here.