With rental rates climbing and the real estate market remaining competitive, you may think renting your Sarasota home out to tenants is a good idea.
You’d be right.
High-quality, well-maintained rental homes in Sarasota are in high demand. The population in Sarasota is growing, and there’s a large pool of excellent tenants looking for homes to rent. Many people who had considered buying are deciding to rent instead, and the tenant pool in our region covers every possible demographic – from college students to retirees.
Maybe you’re thinking you’d like to rent out the house that you’re moving out of, or the home you’ve inherited, or the property that you just aren’t ready to sell.
You’re in a relatively strong position. Renting out a property that you already own can bring you regular monthly rental income. It can also set you up for a lot of wealth in the future. Your asset is going to appreciate in value while you build equity and your tenants pay down any mortgage and contribute to expenses.
Here are some of the most important things that you don’t want to lose sight of as you begin your new endeavor as a landlord. Leasing a home isn’t always as easy as it looks. These tips should set you up for success.
You Need to Treat Your House like a Business
Prepare yourself to detach emotionally from the house. Even if you once lived there yourself, it is no longer your home. In fact, it will become someone else’s home, and you need to be okay with that. Landlords who have an emotional attachment to their property often suffer during the leasing process because they worry that the tenants won’t take care of the place the way they’d like.
You will not be able to show up at the home for no reason and you don’t want to be too confrontational or too friendly with your tenants.
It’s important that you think about this rental property as a business. All of your decisions have to be made based on what’s good for the business. Make sure you can set the necessary boundaries and treat your property like the income-producing business it is.
Sarasota Rental Homes Cost Owners Money
Yes, you’ll be earning regular monthly income in the form of rental payments. And yes, your property will increase in value. Leasing a home is profitable.
What you need to know, however, is that there are also costs involved that you cannot escape. You’ll have to invest some money making the property ready for the rental market. This might require new paint, updated floors, and simple renovations that will make your house attractive to tenants. You’ll also make these changes to ensure you’re earning as much as you can in rent.
There will be a vacancy cost as well. When one tenant leaves, you’ll need to invest in improvements and cleaning in order to make the property ready for a new tenant. That’s going to take a few weeks to a full month where you won’t have rent coming in.
Fixed and variable expenses need to be budgeted for. You know you’ll have to pay your mortgage, taxes, insurance, and professional fees like landscaping, pest control, and property management. There will also be repairs, and those aren’t always easy to budget for. Can you replace a stove if it breaks?
Make sure you can afford to rent out your house.
Routine, Emergency, and Preventative Maintenance Considerations
All of those minor issues that you noticed but didn’t fix while you lived in the home yourself will now need to be taken care of. Before you put it on the rental market, you’ll need to conduct a thorough inspection and take care of all repairs – no matter how major or minor they might be.
Maintaining your home is perhaps one of the most important things you’ll do as a rental property owner. You have to ensure it’s safe and habitable for your tenants.
- Emergency Maintenance.
Responding to emergency maintenance is obviously a priority when you’re renting out a property. If your tenants call you because a leak is causing a flood in the bathroom or because a tree has fallen down and crashed through the roof during a tropical storm, you know you have to respond immediately.
These unexpected repairs can be expensive and stressful. You’ll want to avoid those by taking a preventative approach to maintenance and by making small fixes while you can.
- Routine Maintenance
Routine maintenance should inspire the same sense of urgency as those emergency repairs. Taking care of even minor issues right away will make your tenants feel valued and important. This contributes to excellent tenant retention, which saves you money on turnovers and vacancies. You’ll need a solid set of vendors and contractors who can respond to the minor issues and help you prevent larger problems from building up.
- Preventative Maintenance
Preventative maintenance can save you money when you’re leasing a home. It also protects the condition of your home. Property values go up when you’re adopting preventative measures. You can keep air conditioning problems to a minimum, for example, by having an HVAC technician inspect and service your system once a year. It’s worth your investment.
If you don’t think you’ll be able or willing to put some money aside every month for potential maintenance, renting out your property probably isn’t a great idea. You need to have some reserves.
State and Federal Rental Laws
The legal landscape is challenging, even in a relatively landlord-friendly state like Florida.
When you’re renting out a Sarasota property, you have to be compliant with all state, federal, and local laws. If you don’t know the laws that govern the eviction process, you could find yourself making an expensive mistake and delaying that eviction.
You need to know security deposit laws, too. There are specific ways that you must collect and hold that deposit, and some strict deadlines to how you return it. Do you know what you can deduct from a security deposit and what you can’t deduct?
Fair housing laws are especially in need of attention. You cannot discriminate based on a list of protected classes, and if you do, you’ll face high penalties. Even using the wrong language in a rental listing can lead to a fair housing investigation.
Recovering from a legal misstep will be expensive. If you want to rent out your home, you’ll need to educate yourself on the current laws and commit to staying updated on all the changes.
Place High Quality Sarasota Tenants
Placing a tenant is a big step in renting out your house.
It requires a good marketing strategy so well-qualified renters find your home. Most people are looking online, so make sure you have a strategic advertising campaign in place that provides great photos, engaging descriptions, and all the information a person might need before seeing your property.
As you show your home and have the applications coming in, you’ll need to know how to screen them. This is crucial. The tenant you place can often make or break your investment experience.
If you allow a bad tenant to rent your home, you’ll find yourself spending more time and money than you want trying to collect rent, enforce the lease, and protect your investment property. A great tenant, however, will pay on time, communicate well, and help you take care of your home.
You need an application that’s compliant with all state and federal fair housing laws. Be careful when you’re screening; you have to screen every application consistently, and you need to be protective of your applicants’ data and financial information. When you’re screening, check these important things:
- Nationwide eviction and criminal check
- Employment and income verification
- Credit check
- Rental history check
Many people who rent out their homes neglect to talk to former landlords, but this is important. You can ask if rent was paid on time, if there was any property damage left behind, and if that landlord would rent to the tenant again.
There are plenty of screening services that can help you with this step. A Sarasota property manager will also be an invaluable resource when you’re trying to lease your property to a qualified tenant.
Surround Yourself with Experts
Be willing to listen to people who can help. Sarasota property managers, for example, can play a big role in helping you succeed. Instead of trying to figure everything out on your own, don’t be afraid to ask for help. You can leverage years of experience, a keen understanding of the local rental market, and a vast network of contractors and vendors.
We know these things can seem overwhelming. And these are just a few of the things you need to consider while you’re deciding whether it’s a good idea to rent out your house.
We can help you have a successful rental experience. If you think you might want to move forward, don’t hesitate to contact us at Anchor Down Property Management.