Are you considering leasing out your home instead of selling? You’re not alone. What can happen to you as a landlord? What do you need to know?
With the cost of a sale transaction averaging about 8% of the value of the home, that’s a lot of cash you could spend elsewhere, namely toward your retirement. Let’s face it whether you sell or lease you’re going to have to properly make the home ready for the market. This typically means ensure good paint, good landscaping, good flooring and having everything fully functional. Hide something at your own peril. It will come back to bite you no matter which route you go. Thus the make ready cost isn’t optional.
Now you’re leaning toward leasing or renting out your home but concerned about what mistakes you might make.
If the possibility of having a tough time managing tenants has crossed your mind you’re smarter than the average bear. So let’s talk about what you might run into.
- PRICE IT RIGHT! Do not make the mistake that your fellow investors make every day thinking that your property is more valuable than others simply because it’s yours. Seek help from a professional, NOT ZILLOW! Texas, among others, is a non-disclosure state. In other words, 3rd party websites are guessing. Realtors with databases of statistics are not. Property Managers know what to do beyond the basic stats. They live and breath leasing. To them it’s their bread and butter, not a side job they do as a favor. Time is money so don’t waste time saving a couple bucks. Hire someone to do this right or you’ll waste more than you could save.
- Failing to do a proper make ready. Your tenants are going to look similar to your home. What do I mean? If you deliver to market a junky home, expect a junky tenant. No one that pays their bills on time and cares for the family is going to lease a house that is dirty, has dirty carpet or paint, horrible landscaping or other issues. Want tenants with no issues? Start by delivering a property with no issues.
- Failing to ensure everything is in fully functional, working order. You can’t put off repairs. If something is broken it’s not going to fix itself. Deal with it today or pay more tomorrow. This is the same as above but more functional than cosmetic.
- Leasing the property yourself and not knowing what to ask, where to get the data processed and what to do if you counter or decline the tenants application. Do you know that if you run a credit check and then make a counter offer on the pricing or any other term you have to deliver a form with information required by federal law? I can almost assure you that your real estate sales agent doesn’t know this either. Hire a property manager to do your leasing even if it’s not us.
- Not knowing what you don’t know. Failure to know what to expect can get you into a lot of trouble. The problem is you won’t know it until it’s too late and then you’ll be looking for a contractor and an attorney to help you out of the mess. We get calls from owners who self manage all the time wanting help.
- Lastly document, document, document and get ready for late night calls and unusual circumstances. Life is really easy until you get people involved. Then all rules go out the window. Expect your tenants to wake up on a Sunday and want to talk to you about something they dreamed up that is opposite of what the lease permits. Get ready to say no, a lot.
If we can help you find, manage or provide support related to your Austin rental property give us a call today. 512-994-4323. We’re ready to help. www.1836PropertyManagement.com