The key to making money on your rental is easier than you think:
1) Establish your Rent - To determine the amount of monthly rent for your home, do your research, ie., size of the home (sq. ft., bds, ba), location, and condition of the property. Take into account if the home is furnished, utilities are included, pets are allowed, etc. Researching online with Truilo or Rent.com are good places to research the market. If the rent you can get is better than or equal to your mortgage rate on the home, you are in good position to rent your asset.
2) Have an iron clad contract between you and your tenant – The Lease Agreement protects you as the owner, and in essence your home’s value. Lease Agreements can be pulled offline as a basic model or an attorney can write up a binding contract that spells out all the expectations of the tenant to live in your home. All property management companies have both a contract between themselves and the owner and one for the tenant. Always take time to review both so that all of your concerns are addressed in writing.
3) Collect your rent – Your investment is not an investment if rent is not collected in a timely manner. All Lease Agreements state when the rent is due and your job or your property management’s job is to collect your money, deposit it and evict the tenant if there is an issue.
4) Always inspect the home periodically – It is your right and in most Lease Agreements it is spelled out that you or your management company have the right to enter the home at any time to ensure the home is being properly maintained, that there are no infestations and outside of normal “wear and tear” the home is being taken care of properly. Do not hesitate to evict when the home is not being cared for as outlined in the Lease Agreement. Typically, the tenant does not improve their standard of care which devalues your home and eats into your profits with repairs after they are evicted.
5) Always consult your tax preparer for your write-offs – There are a lot of advantages from the additional income a rental unit can produce, to the allowed tax advantages available. Always consult your tax preparer so you are aligning your investment in the best position to maximize your returns