Before you invest your money in a rental house, there are some things you should think about. First, make sure the property can be rented. Some neighborhood associations restrict the number of rentals allowed. You should review the covenants for any rules that might affect your investment.
Financing a Rental Property
Financing for investment property is different from a mortgage that’s given to a homeowner who is an owner occupant. Find a mortgage professional who can help you understand down payment requirements and interest rates. Insurance policies are also different for rental properties. You need to learn which companies will insure rental houses.
Choosing Reliable Contractors
Liability is always a concern for landlords, so hire licensed and insured contractors when maintenance is required at your property. Do-it-yourself repairs are never a good option, and you cannot require the tenant to make repairs either.
Tenant Screening and Leasing
You have to know how to screen a tenant. It’s better to wait on a qualified tenant than to approve a bad tenant and allow that person to move into your house. It’s tempting to approve any tenant who wants to move in tomorrow, but that’s usually a red flag and you want to avoid it.
Have everything in writing during the move-in process so everyone remembers what was said. Do a move-in condition inspection with lots of documentation, and note the condition of the house and any existing damages. Take pictures. At the time of move out, do another inspection to assess damages that were caused by the tenant. You have to follow certain procedures if you’re withholding money from the security deposit.
Lease Terms and Fair Housing
While the tenant is living in the house, that tenant has possession of it. Your lease should allow the property owner to gain access and inspect the property when necessary. It also should allow that marketing can begin toward the end of the lease.
Fair housing applies to rentals also. Landlords cannot discriminate based on race, religion, color, sex, national origin, handicap or familial status. You also can’t refuse to rent to a tenant who has a service animal or a therapy animal, even if you don’t want to have pets in your home.
The Georgia Association of Realtors has published a new document: What Landlords Need to Know About Renting Houses. It outlines all of this and more. If you’d like to read it, we have a link on our website http://www.tricityrealty.com. You can also contact us at Tri-City Realty Services to talk about our investment opportunities.