Taking In Renters? 4 Things You Should Consider
I always loved the boarders of classic novels. The artist living the attic. The traveller who becomes one of the family. But the decision to rent out part of your space- as so aptly pointed out by Yahoo! Finance- is not one to be taken lightly. Here are 4 things you should consider before renting out the granny flat.
How Do You Stand Legally?
Knowing the rental rules of your area is a necessity when you are thinking of renting out your basement to a local bohemian. While it might not seem like a huge del at the time, it pays to set everything up properly and in the full light of day. If you have a bad tenant or need assistance, and haven’t complied with rental regulation, you’ll end up in a sticky space. A Landlord Association or even your local real estate agent will be able to give you a better idea on the ins and outs of the process.
Is It Up To Scratch?
People are desperate for space- especially in the cities- but using that desperation in order to rent out something not quite up to standard is inevitably backfire in the long run. Ask yourself whether you would consider living there. If the answer is no, perhaps look at leaving it off the market or doing some repairs. You want a tenant who is going to look after the place and treat it with respect, and you have better chances of obtaining one if the space is clean and well-maintained. Sit down and work out the numbers on whether the essential repairs will outweigh the benefits of having a tenant over a long period of time. A space that you can rent out can be a good investment, so consider whether your outgoings are going to justify the income it generates.
Do You Have Time To Be A Landlord?
Yahoo! Finance suggests you should expect 10% of your rental income to go on repairs- any less than that, and you won’t be maintaining the property adequately. Those repairs take time to organise, and you will have to be available 24/7 should urgent repairs be required. Ask yourself whether you can fit in the extra time required as a landlord into all your other commitments. Time is money so you need to consider if renting is going to be a worthwhile use of your time resources.
Would You Be A Good Landlord?
If dealing with people isn’t your thing, or you really need your personal space, all the extra money in the world isn’t going to make renting out your space room worthwhile. You need to examine your personality and consider whether you would be able to be friendly while maintaining a professional level of conduct. Unlike renting out an investment property, where you can stay at arms length, you’re going to be exposed to some of your tenant’s activities. If that feels like an uncomfortable fit for you, maybe consider other options for generation extra income. If, however, you can enforce some ground rules while allowing each other space, renting out your extra space could be a great way to maximise your earning potential.
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