Friday, April 27, 2007

Contemplating Self-Management of your Rentals? PART 1

As more and more properties are listed for sale, homeowners are finding it increasingly difficult to sell.  When a home doesn't seem to be selling, sometimes the owner contemplates renting out the home instead.  Perhaps you have toyed with the idea of renting out your place in case your home doesn't sell just to make sure you don't lose the new home you're having built.  If you have thought about renting out your home, there are many things to consider.  The most important question to answer first is:  Do I want to manage the property myself, or have a property management company do it? 

If you decide to manage your property yourself, you'll want to have answers regarding the following:  a) how are you going to locate credible tenants, b) what term of lease agreement are you willing to accept (3 month, 6 month, 12 months?), c) will you allow pets, and if so, will there be a pet deposit? (have you considered any other deposits... security, cleaning, etc.), d) what utilities, if any, are going to be included in the rent, e) who will be responsible for the yard (is an HOA involved that will fine you for allowing it to get overgrown), f) are you willing to purchase appliances (washer/dryer/refrigerator) for the tenant if necessary, g) what is the going-rate for rentals in your area (a recent report stated the average apartment now rents for $800/month), h) how will you deal with non-payment or late payments? i) do you know the necessary steps to serve an eviction notice, and j) have you registered your property as a rental property with the county assessor?

Recently, I was asked for information on serving an eviction notice, and it dawned on me that due to the tremendous amount of homes for sale right now, many sellers are considering renting their property instead.  So, over the next couple of weeks, I will be posting several additional articles regarding different aspects of self-managing your property.  As you read up on these articles, you should be able to determine whether or not self-management is for you. 

If you have any personal experience with self-management of rental properties, feel free to comment with any other information/tips you believe should be considered in this series of posts.