What To Know Before Renting Out Your Home

Dated: 11/13/2016

Views: 1118

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What to Know before Renting Out your Home

Owning your home gives you the option to convert your unused basement into a finished suite, ready to rent out to perspective tenants and enabling you to pay off your mortgage faster. With today’s competitive housing prices, many home owners are taking this route to be able to actually afford the cost of living.

As enticing as becoming a landlord may be, it does come with a lot of responsibility. Be sure you know what you are getting yourself into and what legalities come along with it.

Just because you have space for a renter, doesn’t mean you are allowed to do it. Be sure to check with your municipality and apply for the proper permits, meet the required building codes and make your insurance company is aware of the secondary suite. If you don’t play by the rules and you’re discovered by authorities, you’ll be forced to pay fines, and dismantle the rental property. If something happens to your home or possessions such as a house fire or theft, your insurance company may not pay the claim due to the fact that they were not made aware of the rental suite.

Remember that you won’t pocket all of the rent. With tenants, comes the responsibility of home maintenance, additional insurance and property upkeep. Some tenants may have higher standards than you do and expect things to be in like-new working order. You should be handy in all areas of home repairs - unless you want to pay someone else to do the work, and know that with each new tenant comes constant move-out cleaning, painting, fixture upgrades and appliance repairs. Also, don’t forget that you need to declare your rent as income and pay tax on it accordingly.

Ensuring you are aware of the rules and rights of a renter is also important. Protect yourself from as much as possible, and always ask for first and last month’s rent when your tenants move in, along with a security deposit to cover damages. Renters are often protected by legislation and governing bodies such as the Residential Landlord and Tenant Act in Alaska, which entails major rights and doesn’t allow you to evict someone easily if you change your mind.

Being a landlord and housing tenants in your own home, does have it’s advantages, but be prepared to treat the responsibility as a part-time job and know what you are up against before you agree to such a permanent commitment. Showing your space, and finding the right tenant is key. Consider hiring the services of a Realtor® as we can also provide you with a realistic rental price estimate, advertise your listing on credited MLS websites and share our decades of working with investment properties with you.

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