If you need to move but are having difficulty selling your house, you can opt to rent it. By renting out your house, you still maintain ownership of the house, but you generate income by charging someone else to live there. This can be a lucrative endeavor if done correctly. There are many steps to take to prepare for renting your house, as well as many legal factors to consider when drawing up a lease.

Clean and Repair the House

Give your house a thorough cleaning and make all repairs before attempting to rent your house. A buyer will be more apt to want to rent your house if it is clean and in move-in condition. Treat your house as though you are showing it to sell. All furniture and decor should complement your house and show it off to the potential renter. The house should be free of repairs, especially major ones such as heating or air conditioning, roofing, windows, doors, plumbing, or electrical problems.

Determine a Renting Price

Check out similar houses in your neighborhood and see what they are renting at. Your house will have to compare with the fair value of the neighborhood. Ideally, the rent should at least match your mortgage payment amount. Research the area to determine if you can raise the rent any higher than that. In some areas you might not be able to compete in the rental market and make a profit off your tenants. If you find that you cannot rent the house at a fair market value that suits your income needs, then selling the house or keeping it may be your only options.

Hire a Property Management Company

Property management companies essentially rent out your house for you. This is a good option if you will not be residing in the same state as your old residence. Management companies will do all the paperwork, repairs, maintenance, and find people to rent your house. You will have to pay for this service, but if you are not going to be living in the same area, it may be to your benefit to pay someone else to manage your property for you.

Draw Up a Lease

Preparing a lease is important for homeowners wishing to rent out their houses because it details a binding contract between the tenant and the landlord. The lease should state what the tenant is responsible for, such as lawn care or trash disposal. The lease needs to outline any provisions such as pet policy, smoking policy, length of lease, military clause, utilities, parking, rent amount and acceptable payment methods, or any other responsibilities of the tenant or landlord. If you are worried about repairs, consider including a deductible in your agreement. For example, if something breaks, the tenant is responsible for the first $75 of the repair. This will encourage your tenant to take care of easy repairs themselves, or call you before sending you a bill from the plumber or other repair service. Have a real estate lawyer look over the lease for specifications. You can also search online for sample leases.

Source:

Lovemoney.com: How to rent out your home

USRentalListings.com: How do I Determine the Fair Market Rent for My House?

How to rent out your house