Whether you’re renting out your home for that extra side income, or you’ve recently upgraded to a new home and wish to turn your former place into an investment property. Whatever the reasons may be, there are a few things you need to carefully consider before renting out your property.
As we’re aware, not all homeowners are able to sell their property at their desired price and time. Because of this, renting it out could be the only possible solution. Becoming a landlord involves a lot more than just handing over the keys and watching your monthly rental bills roll in.
As a landlord, you would know that mitigating risks means having a backup plan to prepare yourself for an unforeseen event. It’s important to have an in-depth understanding of the drawbacks of converting your home into a rented property.
Here are a few important things you need to consider before renting out your property.
Is your home suitable for rent?
You may put up an advertisement for your home announcing to the public that it’s up for rent, but that doesn’t necessarily mean that it’s rentable. A good rented home needs to look appealing to the rental market. If you want to ensure that you get tenants, you’ll need to make sure you get those repairs that you’ve been putting on hold fixed. With that, you could also be increasing your rental price for all you know. Great house fixtures and fittings will help your home be more appealing to the market.
When you’ve invested a lot of money in your property, the next thing you want on your list is to acquire the extra protection for your property before renting it out. As a landlord, you’ll need this specific insurance to provide you coverage for tenant damage and rental issues, to which general home insurance won’t be covering.
When you’re insured with landlord insurance, cover will include the cost of repairing damage in an emergency such as a gas leak, burst pipe, or pest infestation, accidental damage cover for your property and your contents, legal cover to recoup lost rent, compensation claims due to tenant injury, loss of rent in the event the property is left vacant, loss of income cover if your property is damaged and your tenants are forced to move out.
Get to know your tenants first
Just like every other relationship the rule of thumb is to get to know your tenants first before anything else. You don’t want to invite a troublemaker tenant to your property. Undergoing a background screening is important to avoid discovering the possibilities of your tenant possessing a criminal record.
When you establish a positive and healthy relationship with your tenant, this goes a long way in helping you to get an immediate and faster response should any problems arise between you and your tenant.
Protect yourself legally
When it comes to documentation work, you need to ensure that you conduct your investment in a legal manner. This involves everything from the tenancy agreement to rent collection and policy termination should it happen. You may even want to consider revisiting and understanding the Residential Tenancy Act just to be sure everything is being handled in a legally compliant approach.
If there comes a point where you’re uncertain about how things should go about, consult with a certified public accountant immediately for relevant information related to your investment property.
Cross-checking is always important as you want to ensure you gain a strong foothold in your decision before renting out your property. On top of this, be prepared to make timely repairs on your property or you could face possible lawsuits from your tenant.
Once you have considered all these aspects, it would suffice to say that you’ve done your part to factor in the possible circumstances that may occur when renting out your property. When you’re prepared and equipped with the right information before renting out your property, this saves you time and trouble and puts you at ease knowing that you’re covered in every step of the way.
For more information on the most appropriate insurance for your investment property, contact East West Insurance Brokers today for advice.