Education and news for smart DIY landlords!
If you’re looking to earn money by becoming a landlord, you might as well consider converting your primary home into a rental. There are advantages to this: One is that you know your house completely - its issues, as well as the entire neighborhood.
To be able to convert your home into a rental house, you need to do a few things. Here are the steps you should take:
Even if you already have homeowner’s insurance, take note that it differs from rental property insurance. That said, you need to make sure that you convert your current policy to a landlord’s policy. A landlord’s insurance will cover physical property or another person’s medical bills should a tenant get injured in your rental because of your negligence.
Read more: 7 Tips to Reduce the Risks of Landlording
Just like any other business, you should secure a permit. Check the requirements in your locality. An occupancy permit is important because it allows your rental home to be recognized by the local government. Also, it indicates that the rental is fit for occupancy and has met all housing and building codes. If your property fails to pass the inspection, don’t worry - you will be provided with a list of items to be completed.
Turning your house into a rental will mean that your taxes are handled differently. As a landlord, you’ll be able to take advantage of a wide variety of tax deductions. These deductions can include mortgage interest, utilities, homeowners’ association fees, repairs, home office, and travel. Always consult a tax professional about homestead exemption.
One of the best ways to prepare your rental property for tenants is to perform the necessary repairs and upgrades. Doing this will boost your property’s appeal, ensure that it’s in a habitable condition, and of course, increase its value. I don’t know about you, but a lot of new landlords find upgrades and repairs a fun experience. Consider if you should go the DIY route for some tasks or hire professionals to be able to save time. Try to complete all the improvements prior to your first showing to create a positive impression on renters.
Now comes the exciting part: Finding not just any tenant, but high-quality tenants. There are plenty of ways to do this. The typical and old-fashioned way is to put up “for rent” signs. But don’t limit yourself to that. Since people have gone digital these days, advertise, submit it to listing sites, and post across social media channels. Also, don’t forget to ask your friends and family to spread the word. Word-of-mouth marketing never fails to bring in good potential renters.
There you have it - steps to turn your house into a rental property. Are you ready? Before you get started, I invite you to take a look at our other guides on landlording as they will help you assess if landlording is for you. Speak with other landlords as well so you can ask for valuable advice!
If you’re ready, make Landlord Prep your go-to resource for landlording education. Here, we offer a complete DIY landlording course to get you on the right track. Join our academy today. If you want, you can check out Flavia’s real estate investing webinar first!