How to Rent Out a Condo

Renting out a condo can be profitable and reasonably straightforward if you know the proper steps to take. You must do a small amount of set-up in the beginning, along with a fair amount of investigative work on any potential tenant. But the pay off--both financially and emotionally--can bring you confidence, empowerment and a padded wallet.

Things You'll Need

• Tenant application form
• Rental lease form

Instructions

1. Make sure that you have all your legal business in order first. Check to be sure that the homeowner's association (most condo complexes have them) allows you to rent out to any qualified tenant and what qualifications need to be upheld. Next, be sure that you are covered with the appropriate amount of liability and fire insurance. This is different than homeowner's insurance and includes having a tenant living under your roof. Finally, do a web search or go to a stationary store or office supply and get yourself a legal, standard lease for renting to a tenant. You can decide on a month-to-month or even a year-long lease. If you need to add any special criteria according to the bylaws of the homeowner's association, you can do this with an addendum on a separate piece of paper.

2. Publicize your condo for rent. Newspaper classifieds, especially on Sundays, run an entire section just on available rental units in the area. Be sure to know how many bedrooms, bathrooms and what amenities are offered by living in your available condo. List them in your ad. The better it sounds, the more interest you will generate. This marketing step becomes important. The quality of tenant that you attract can be directly related to the desirability of your classified ad copy. If you need help with any part of this, consider the option of listing your property with a real estate agent or company that specializes in finding qualified tenants for your available rental.

3. 

   Interview potential tenants who call to express interests in your condo. The interview process usually includes a showing of the condo, an application for the tenant to fill out which includes such information as their Social Security number, past landlord phone numbers, job status and personal references. Use this information to call past landlords to see what the potential tenant has been like in previous housing situations as well as check on his credit score to make certain that there is a history of paying outstanding bills. Personal references are good to call as well. It is always nice to hear outstanding qualities about your potential renter.
   Again, if this step seems overwhelming, consider using professionals for this part of the renting process. After a tenant is pre-qualified (with a credit and background check that is done for you), only then are you sometimes asked to meet and decide if this person is a right fit for your condo. The cost for the professional services rendered by a real estate company is usually 1 month's rent.

4. Choose your tenant, sign the lease and decide on the move-in date.
   Be sure to have a walk-through of the condo before he actually moves in to write down any pre-existing conditions that you both agree on regarding the condition of the condo. That way, nothing is left to "hearsay" when it comes time to return the security deposit to the tenant in the distant future.

Tips & Warnings

• Oftentimes, if a potential tenant does not have fabulous credit but passes the other tests with flying colors (former landlords rave, the employer loves him, his personal references are stellar), consider what your gut tells you along with the cold, hard facts on the application. Good tenants are gold--both financially and emotionally. If you feel that someone will turn your rental into a home, respect you, communicate, as well as pay his rent on time--consider him strongly. Charge the chosen tenant the first month of rent, last month of rent, plus security deposit to move into the rental.

• If you accept cash from any new approved tenant (as opposed to the recommended check or money order), make sure that he receives a receipt as well as gives you a written receipt for rent money rendered to you. A paper trail keeps the transaction clear.

Resources

• A national resource to find property managers by state.
• A national service that allows you to find and print out (for a fee) all kinds of legal rental documents.
• Fee service that provides credit, background, criminal check and so forth of potential tenant.