Renting out your property is a great way to add extra income, especially if you’re away on business or with work, and won’t be needing your home for some time. However, even if you’ve purchased an investment home, you will still likely have to treat it as a single family dwelling, and take specific steps to rent it out legally and safely. You’ll also have to figure out management, who handles maintenance and repairs, an emergency contact number for tenants, how to collect rental fees, and much more. The following ten steps will get you started.
Renting out your home
1.Check with the Woodinville Town Hall – The first step to renting out your home in Woodinville is to check zoning. If you live in a single-family home zone, you can’t rent your home out to multiple people. You may also not be allowed to offer weekly or short term rentals. You can also check City Ordinance Chapter 21.08, Ordinance 620 to see zoning regulation and Woodinville’s zoning map.
2.Check Your Insurance – If you have an insurance policy, you will have to change your policy, and you’ll have to inform your current insurers if you allow renters into your home without changing the policy. You also need liability in case something happens to tenants on your property, and coverage for your home in case of natural disaster or even a tenant caused accident.
3.Get Approval From Your Bank – If you have a mortgage or lien, it is extremely important that you contact your bank to ask if you can rent out your home. Some mortgage contracts specifically forbid it, or request that you ask for permission first. In fact, many banks will charge slightly more for your mortgage if they know you are profiting from the property. Most will also require that your tenants have renter’s insurance.
4.Removing Your Personal Belongings – You don’t want to leave anything personal, valuable, or easily breakable in the property. While most tenants will treat your home with respect, accidents happen. Remove all of your personal belongings and any furniture you don’t want them to use to a storage facility or other area.
5.Preparing the Home for Renters – In addition to removing your personal belongings such as decorations, cooking utensils, food, valuables, and any furniture that you don’t want them to use, you should clean and prepare the home for renters. One important consideration is that homes without personalized decorations or colorful walls are more likely to rent, so painting walls in neutral shades can definitely help you with marketing. You want to clean, fix any broken or out of place items, oil hinges and doors, replace batteries in carbon monoxide detectors. You should install carbon monoxide detectors if you don’t have one on every level of the home. According to the RCW Landlord Tenant Act of Washington, you are responsible for keeping the home fit for human habitation, which means providing heat and cooling, ensuring the property is safe, and that doors and window are sealed.
6.Hiring a Property Manager – Hiring a local Woodinville property management company is one way to save time, and make renting your property possible if you’re not living nearby, or don’t have family or very good friends who want ot take on the responsibility of managing your rental home. Because this typically involves visiting the property on a regular basis, taking emergency repair calls, hiring and paying local maintenance and repair companies, and working directly with your tenants, this is a big job, even if you’re living nearby. A property manager handles all of this for you, at the cost of a small percentage of the rental rate, and allows you to rent out your property without understanding real estate law. In addition, if you hire a property manager, you can skip the following four steps, as your property manager will typically handle them for you.
7.Work Out the Rental Rate – Research your local area, and compare what similar houses in your neighborhood are renting for. Websites like Trulia and Zillow are great resources for comparison.
8.Writing Up Contracts – Writing a lease contract is an important step to renting out any property. You can use a sample leasing contract, such as this one offered by the Public Law Library of King County, but should modify it to suit your needs with the supervision of a real estate attorney. Your leasing contract has to protect your interests, abide by the Washington Landlord Tenant Act, and abide by city landlord/tenant regulations.
9.Marketing – Marketing your property is more than sticking a for rent sign in the front yard, because it is very unlikely that you will rent anytime soon using this tactic. Instead, add your rental to online listings on sites like Zillow and Trulia, or advertise in the newspaper.
10.Tenant Screening – Chances are that you will have to interview multiple tenants before one decides to rent your home. You’ll also have to screen each tenant to ensure that they have the financial background to afford paying the rental feel. You also want to screen their references and other information provided by the tenant. This is important, because it protects you from a tenant with a history of backing out of contracts, not paying, or damaging property. This should involve a credit check and a background check, but you need their signed permission in order to do so.
Finally, once you rent out your home, you will have to take care of long term maintenance, repairs, and handle tenant issues if you don’t have a Woodinville property manager on hand to take care of these details for you.
Do you want to know more about what a Woodinville property manager can do for you? Contact SJA Property Management for more information and a free property management quote.