Do you know how to prepare your home for the rental market?
Many landlords, after they have decided that renting out their home is the right path for them, ask us "What do I need to do to prepare my home for the rental market"? These landlords mistakenly assume that there is not much that they need to do and that renters will rent anything at any price.
This is not correct. Let's review in more detail why you need to prepare your home for rent.
1. Preparing To Rent Out Your Home Is As Important As Preparing It To Sell
If you want the best tenants, you have to prepare your home for the rental market and stage it properly. Neutralize colors, replace stained and worn carpet, steam clean the carpets, touch up paint, declutter closets and storage areas, spruce up the exterior landscaping, check all of your mechanical and plumbing systems, and fix all of those repairs that you have been putting off. You want to turn your home over to tenants in the same condition that you want to receive it back. So take your time, do repairs correctly and thoroughly, invest some money up front and make sure that your home is in excellent condition. It matters. Good tenants have choices and, if your home is not excellent, the best tenants will pass it by and go elsewhere.
2. Ensure Your Rental Property Is In Compliance
You need to get into compliance with local laws. This compliance may cost you a few up front dollars to be prepared.
In Baltimore and Howard Counties, you need to pass a rental inspection in order to get your local rental housing license. You need to fix smoke detectors, install carbon monoxide detectors, and make sure that all systems and all safety features (railings, steps, etc.) are in excellent condition. The County is looking out for the safety of the tenants and protecting them from landlords who allow their homes to go into disrepair.
Take time now, before the inspector comes, to check on these systems. But don't worry, we are here to walk you through the process and help you with all of the paperwork.
3. Convert Your Homeowner Insurance Policy To a Landlord Insurance Policy
For new landlords, you need to convert your homeowner insurance policy to a landlord insurance policy. Yes, there may be a few additional fees, but you need to make sure that you have liability coverage in your policy to protect you from tenants or tenant's guests who may have an accident or injury.
This is important. Contact your insurance agent as soon as possible, understand the limits of your coverage and don't scrimp on those additional clauses that will protect you. Remember, you need to name Chesapeake Property Management, Inc. as an additional insured on your policy and, once again, we will help you with the process.
4. Consult With Your Tax Advisor
We highly recommend that you consult with your tax advisor before you go down the landlord path. Changing over from an owner occupied property to a rental property comes with tax advantages and implications. It is better to know this now rather than later. Find out about tax deductions and depreciation and make sure that you keep your records in exactly the way your accountant wants them.
Also, ask your accountant about selling at a later date and what those tax implications may be. The State of Maryland taxes almost everything so make sure you understand the pluses and minuses of selling in the future and work the calendar to your advantage.
5. Do You Have the Temperament To Be a Landlord?
Before we move forward, check your temperament again. We know that the above list can take some people by surprise so you have to be committed to being a landlord for a significant period of time to make the costs and potential stress worth it. Do you really want to rent out your house? Why? Do you have the financial cushion to handle unexpected repairs? Just make sure that you do an honest assessment of yourself before you go on the market.
Once all of the above is done and you are ready to go on the rental market, give Chesapeake Property Management a call. We are here to help and excited to work with you.