How to Rent Out a Home to Purchase a Second Home
If you want to purchase a second home and you already own one, you may be able to offset your new home note by renting out your existing home. In fact, many individuals use this method to buy a new home without actually having to use their own income to pay for it. Below, you will find step-by-step instructions for how to rent out a home to purchase a second home.
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Instructions
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Prepare Your Existing Home to Be Rented. Your first step should be preparing your home to be rented. This includes cleaning the entire home from top to bottom. Some of the detailed cleaning you may want to do includes:
- Dusting the home, including mantels, window casings, baseboards, etc.
- Steam-cleaning carpets.
- Mopping and waxing tile or linoleum floors.
- Washing windows and cleaning behind appliances.
- Scrubbing bathrooms and toilets.
By ensuring that the home is spotless and aired out, you have a better chance of renting the home. In addition, you should probably have the home inspected by a professional home inspector (like ones at American Society of Home Inspectors) to make sure that there are no defects or problems.
If you decide that you would not like to complete these tasks yourself, consider hiring a maid service such as MerryMaids or Molly Maids that specialize in cleaning houses in preparation for renting.
After the home is clean, take pictures of each room as evidence of the condition before renting it out. -
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Conduct comprehensive market research of rental properties in your area. This can be done by visiting www.rentals.com or contacting other homeowners in your area to see how much they are receiving for rent for comparable properties.
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Place an Ad Online or in the Newspaper. Your next step is to let individuals know that your home is for rent. You'll need to place an ad online or in the newspaper about your rental. You should include information such as how much you'd like to receive for the home each month, the deposit amount, how many bedrooms are in the house, how many bathrooms are in the home and whether or not you will allow families with pets or smokers.
Include any other relevant information, such as the application fee if you plan on doing a credit check on potential renters.
One great place to put an ad is www.rentals.com. The price for these ads range start at $29 for 30 days of advertising, which includes unlimited photos and text, maps, fliers and more. If you decide to place a newspaper ad, visit www.dailyearth.com, which lists local newspapers and provides readers with their contact information. -
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Determine Whether You Will Perform a Credit Check. Credit checks are often performed by landlords to ensure that their property will be safe and well cared for and that they will receive the rent payment regularly. Although it's not a guarantee, it is more likely that renters with a good background will pay on time and take care of the property while they are living there.
If you will perform background checks, you'll need to create an account with an online company such as ClearScreening.com or another similar one. You will be required to pay a fee for each check, but if you charge your potential renters that fee, you can offset the cost.
Let renters know up front that there is a fee and that you do credit checks.
You'll interview the renters and check their credit, but all that is left is selecting a renter. -
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Ask Your Renter to Sign a Lease. After you have a suitable renter, ask him or her to sign a lease that spells out rights and responsibilities of both parties. For instance, your lease should include such information as length of the lease, the amount of rent, when payments are due, whether subleasing is allowed, the amount of any security deposits and who will cover repairs and utilities.
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Hire a Property/rental Manager. If you have decided to relocate, you may wish to hire a manager to oversee the management of the property as well as collect rent. To find someone suitable, you should ask friends and family members for referrals or contact an established property management search firm such as All Property Management (See Resources).
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