How to Turn Your Home into a Rental Property?

Are you planning to switch to your new Home and want to make your old Home into a money-making Property?

If Yes, then you’re at the right place!

There’s good news for all landowners who want to profit from their properties without selling them. You can easily turn your own home into a rental income property.

Renting a home is one of the most efficient ways to make money through your property, as you can rent out the space monthly. It gives you a consistent income, and you’ll stay as the owner of the Property, and your rental Income increases from time to time. There are numerous reasons to turn your Home into a Rental Property. If you want to make rental Income from your Property, keep reading this guide.

In this guide, we’ve covered the step-by-step process of turning your Home into a rental income property.

Let’s get started!

Here’s the step-by-step process to turn your Home into a Rental Property:

Step 1 – Decide if you can handle being a Landlord

Many landowners think it’s easy to become a landlord and ask for rental money every month, but it’s not as easy as it seems. There are numerous work & responsibilities of a landlord, including regular calls, maintaining property conditions, and sometimes overdue collecting rent can be complex.

There’s no doubt that Rental Income can be a great source of Income for a landlord. Still, this Income comes with problems that a landlord has to deal with regularly, like unexpected damage, maintenance, security deposit, and many other factors.

However, you can do it on your own or hire a property manager who can handle all these problems without letting you disturb anything. You need to pay the manager, and you can enjoy rental income without any problem. So it’s

completely dependent on your choice to become a landlord. You can do good research and find out the responsibilities of a landlord and then make a fair decision.

Step 2 – Wait for a year before turning in the Rental Property

If you have a mortgage on your home and plan to turn it into a rental property within 12 months, it can be considered mortgage fraud, but it depends from place to place. So you should read the contract carefully before taking a mortgage for the Property, try to stay at least for a year, and then plan to turn it into a Rental Property.

There are many documents you need to look at for a mortgage because if you turn your Property into a Rental Property before 12 months, then intentionally purchasing a home for rental Income can be considered fraud. So, it’s important to read your documents carefully and act accordingly.

Step 3 – Check if you can get Another Mortgage.

If you’re planning to shift to your new Home and want to buy another property to live in, then you need to apply for a mortgage and check if you’re getting the appropriate mortgage to buy another property. For this, you should consider any professional legal consultant to know about the mortgage and help you get a mortgage to buy another property.

Step 4 – Change your Insurance Policy

If you have homeowner’s insurance and are turning your Home into a Rental Property, your homeowner’s insurance will no longer be enough to cover the Property. Having landlord’s insurance to protect your Rental Property would be best.

Landlord’s insurance is more expensive than a homeowner’s insurance, but it comes with numerous benefits:

Structural damages to your Property
Maintenance equipment
Outdoor features like sheds, pools
Minor accidents and injuries on your Property
Legal fees
Loss of rent or damaged Property
Damaged caused by fire, lightning, and hail

These are some essential things covered in landlord’s insurance.

Step 5 – Learn about Tax Changes

To become a landlord, you must know some basic tax rates on your Rental Property. However, when you’re turning your Home into a Rental Property, then you need to qualified tax deductions for Rental Property expenses, including:

Property taxes
Mortgage interest
Repairs and renovations
HOA fees
Landlord insurance policy
Utilities

You can consult a legal firm to learn about legal formalities and tax rates on your rental property and understand the tax changes.

Step 6 – Make sure to Inspect your Property

Before turning your Home into a Rental Property, you need to hire an inspection officer to check your entire Property thoroughly and find all the issues that must be fixed before turning it into Rental Property. It’s important to inspect your Property via experts and see all the problems that require improvement, such as plumbing, termites, flooring, or structure. Once you have a complete list of valid property problems, you must invest money and fix all these issues to keep your home safe and prepare for Rental Property expenses.

Step 7 – Prepare your Property

After fixing all the issues in your property, it’s time to prepare your home for a rental property and make it more attractive and appealing for rent. You can make major changes like new wall painting and outdoor garden finishing, as well as upgrade your interior in the kitchen, bathroom, or anywhere else required.

Once you have a well-furnished Rental Property with working appliances, you increase your chances of getting a good rental income.

Step 8 – Set the Rental Rate

Now, you need to set the rate of your rental property, but it’s not easy for a landlord. You must consult a professional real estate agent like Amar Realtor to select the best rate for your Rental Property. Setting up rent for your rental requires researching nearby locations like Rental Property in California or anywhere you want and finding online rent for similar properties to get an idea. Then, you can set a reasonable rate based on your property condition, location, amenities, and facilities.

Step 9 – Set the Rules

Setting rules for paying guests is important to maintaining your Rental Property. You can add all these rules to the agreement lease and let your paying guests check the document carefully. If they agree with your rules, you can proceed.

You can set the rules as per your convenience, like:

● How many people can occupy your Home?

● Allow pets or not

● Decide the date for rental payment

● Maintenance costs like yard, garbage, and pest control

● Duration to stay can be fixed

And many other rules you can set per your requirements and find the best fit for paying guests.

Step 10 – Decide if you want a property manager

Hiring a property manager for your Rental Property can relieve you from all the stress and problems associated with a landlord, such as collecting rent, maintaining the property, finding tenants, and documenting the property.

So it’s good to have a consistent rental income with peace of mind, which can happen when you hire a property manager. You can research and find the best real estate property manager for your Rental Property and get ready to turn your Home into a Rental Property.

Conclusion

Converting a home into a Rental Property can give you amazing benefits and the best option to make money without selling your Property. However, it comes with many complex processes and documentation that are difficult to handle. At this point, you can get help from professionals like Amar Realtors to help you manage your rental property, take complete responsibility for the landlord’s tasks, and keep yourself free from the rental property process. Contact Amar Realtor for your Rental Property management needs.