Renting out your home is one way to make some serious cash. Before opening up your place for lessees, however, there are things you need to do first. It is a serious undertaking that will require some work on your part. You should also familiarise yourself with laws covering leases like rent recovery. Here are some steps you need to take:
1. Is it Feasible?
You need to do some research on how much you can rent out your place. If you have relatives or friends who are proprietors, ask them. You could also ask estate agents if you are inclined to use their services.
2. Will it Cover Your Costs?
There is also the issue of maintenance costs and taxes. You need to set aside some money to cover the repairs and upkeep of the house. If you are a basic rate taxpayer, the rental income is usually taxed at 20%. For those higher rates, the tax is 40%.
If you are paying a mortgage, be sure to factor this in. You would also need to get consent from your lender before you can rent out your flat. If the place is insured, the insurance company will also require a notice. It is possible that your policy will have some amendments as a result. In addition, you will need another policy called property owner insurance before proceeding with your lease business.
3. Fix the Place
Once you have sorted out the legalities, start fixing up your property. Make sure that the appliances are working and carry out all the necessary repairs. Remove items that are precious or fragile out of the flat. If possible, do some minor renovations to make the property more visually appealing to potential renters.
4. Assess Potential Tenants or Use an Agent
You can now start interviewing prospective tenants. You will also need to ask them for reference and credit checks. Once you have chosen a tenant, you need to execute a lease contract. If this is too much work for you, get an agent to do this on your behalf. Do not forget that their commission is usually around 10% to 15% of your rental income, though.
You can earn a monthly income by renting out your place. Your home may not be ready to rent out immediately, but with a little bit of research and effort, you will be able to earn some extra money that you can use for other expenses.