Author Archive

Tenant move-out letter plus 2 other free templates

Written by Laura Agadoni on . Posted in edited, For Landlords, Landlord Tips, Leases & Legal, Move-in/Move-out, paid, Rent & Expenses, Security Deposits, Step 12 - Move-Out

Your goal as a landlord is not only to have tenants but to keep tenants (the good ones anyway) as long as possible. But no matter how wonderful you are as a landlord, and how great your rental may be, there usually comes a time when your tenant needs to move.

When your tenant plans to move, you should make the move-out process as smooth as possible. This benefits you and your tenant—when your tenant knows what to expect, they’re more likely to meet your expectations. Here are some templates you can use when your tenants’ leases are about to end.

The lease renewal letter

If you want your tenant to sign a new lease, contact them about two months before the current lease is due to end. The purpose of the lease renewal letter is to find out what their intentions are and to explain what they need to do if they wish to continue to live in your rental.

Tip: This is the time to raise the rent if you intend to.

Related: How to raise the rent in 4 easy steps [free template]

Related: Should I increase rental rates every year?

Note: If you do nothing after the lease ends, and your tenant stays, your tenant becomes a month-to-month tenant.

Lease renewal letter template

Note: You don’t have to increase the rent. If you don’t want to, change that section to reflect the rent will remain the same.

2. The move-out letter

If your tenant decides not to renew and wishes to move, send them a move-out letter about a month before the lease ends. The purpose is to give instructions on what you expect of your tenant.

Move-out letter template

Note: This letter contains language about lease requirements. Make sure yours does as well before you include that.

3. Notice to pay rent or quit

If your current tenant missed a rent payment (or two), you probably shouldn’t invite them to renew the lease. In fact, you should send them a letter asking them to pay the rent ASAP or leave.

Notice to pay rent or quit template

Once you rent your property, you will hopefully have wonderful tenants who stay a long time. But since that isn’t always the case, you can still make things easier for everyone involved if you are proactive with your tenants by letting them know what the expectations are during move-out time.

Do I have to pay rent if I lose my job?

Written by Laura Agadoni on . Posted in edited, For Renters, Leases & Legal, paid, Rent & Expenses

The short answer is YES! If you’re in financial trouble and can’t pay all your bills, make sure you pay rent. Otherwise, you can be evicted.

Many people think they can get away with letting the rent slide when finances are tough. This is especially true when renters are in a mom-and-pop type of landlord situation (as opposed to a huge management company).

Not paying rent is one of the worst financial decisions you can make.

Just because you have a mom-and-pop landlord doesn’t mean you’re actually dealing with your mom or dad. Maybe you could get away with not paying money owed to your parents, but you shouldn’t take that risk with your landlord. If you do, you could be out on the streets.

You could be evicted

Not only could you be evicted for not paying rent, an eviction goes on your personal record. When you try to rent another place, the new landlord or property manager will look at your background check and see that you’ve been evicted. And that will make it difficult for you to rent another place.

Prioritize your payments

It’s never good to skip paying a bill, but if you’re in financial trouble because of a job loss or other reason, prioritize which bills you should pay first.

Your top priorities are survival needs: food, medical, and shelter. Make sure you stay healthy and have a roof over your head. Pay for your basic needs first.

It’s better to skip your credit card payment than your rent.

Next in line: pay utilities, your car payment, and legal obligations such as child support and taxes.

After you’ve paid all the above, pay your unsecured debt, such as credit card debt.

Communication is key

When you know you won’t be able to pay all your bills, call your creditors and explain the situation. You might be able to work out a payment plan that you can afford. Some creditors might agree to take a lump sum payment—for less than what you owe—as a settlement. This lessens your bill and eliminates your monthly payments.

Talk with your landlord

Let your landlord know right away if you can’t pay rent. Don’t bury your head in the sand, hoping the situation go away. And don’t keep this information from your landlord, in the hopes they won’t notice—they will.

Besides, if you’re up front with your landlord right away, they might work with you on a solution. They might let you pay rent late one time, for example. Or they might discount your rent moving forward if you do some work in return.

Related: 5 things to do when a tenant stops paying rent

Note: Most landlords are more likely to work with you if you’ve always paid the rent on time, before you lost your job (or whatever financial difficulty has come up), and if you followed all other lease terms.

Keep in mind that your landlord doesn’t have to agree to any arrangement other than what’s in the lease. Your landlord has their own bills to pay.

But it’s a good idea to ask if you can work something out if you find yourself in financial difficulty. Whether you think your landlord will agree to a special arrangement or not, let your landlord know about major changes in your life that affect your ability to pay rent, rather than just skipping out on rent payments.

Note: In general, big management companies are less likely to be flexible with rent payments than independent landlords.

Figure out a game plan

Look at your income and expenses. Maybe not being able to pay rent will only be a one-time incident. But if it looks as though you won’t be able to afford your rent payment moving forward, discuss options with your landlord. They might let you out of your lease, for example, if you agree to leave quickly.

Every situation is different, so discuss your particular case with your landlord.

Discuss your personal situation with your landlord.

What to do if you’re in financial trouble

Here are some measures you can take to help you get back on your feet:

  • File for and collect unemployment if you lost your job.
  • Ask about a hardship program. Call the customer service department for your credit card or loan, and ask about a hardship program that can help you pay your bill. These programs can help in various ways, such as lowering your monthly payment. In many cases, if you enter into a hardship program with your credit card issuer, they won’t report you to the credit bureaus (if you complete the program).
  • Go to your city or county government website for assistance programs. You will often find grants offered by charities, churches, and the government to help with your bills and rent.
  • Get counseling on how to budget. You can find reputable counselors from your local government website.
  • Ask your family or friends for help.

The bottom line

It’s tough to lose your job and then have problems paying your bills. But rent is not an expense you can skip out on. Don’t risk losing your home. Many landlords, if they can financially afford to, will try to come up with a plan that both of you can live with.

3 reasons you might not want to collect a security deposit

Written by Laura Agadoni on . Posted in edited, For Landlords, Laws & Regulations, paid, Security Deposits

It’s important to collect a security deposit that you can use in case of damages to your property, or to compensate you for unpaid rent.

But some landlords have stopped collecting security deposits.

Here are three reasons why.

But first, about the security deposit

The security deposit is exactly what it sounds like—security against damages or unpaid rent. So if your tenant damages your property beyond normal wear and tear, you can use the security deposit money to make repairs. Or if your tenant skipped out on you without paying rent, you can keep the security deposit.

But if there are no damages, and if your tenant has faithfully paid rent each month, you need to return the security deposit. And you need to do so by the deadline for your state.

Some landlords don’t do that, thinking the security deposit is a windfall for them. That sort of landlord makes it necessary for security deposit laws to be created. The problem is that sometimes the laws governing security deposits are more like “gotchas” for the landlord.

Related: How to handle security deposits properly

1. Security deposit laws can be oppressive

Every state, and sometimes jurisdiction, has laws pertaining to the security deposit. You can look up your state’s law here.

Most states have straightforward laws, such as this: Landlords must return the security deposit to the tenant within 30 days after the lease ends. Landlords must give a written explanation and itemize any money withheld. Check your state law since these laws vary.

Chicago, for example, is particularly tough on landlords. Here are some laws Chicago landlords must follow:

  • Landlords must place the security deposit in a federally insured interest-bearing account in an Illinois bank. This account must be a separate account, just for the security deposit.
  • The landlord must tell the tenant which bank holds the security deposit.
  • If the tenant paid first month’s rent and security deposit as one check or as one electronic funds transfer, the landlord needs to transfer the security deposit portion to the separate security deposit account within five business days.
  • Landlord must provide tenant with a signed receipt at the time of receiving the security deposit. The receipt must include the date, amount, name of person receiving the deposit, and a description of the rental unit.
  • Landlord must pay tenant any interest earned within 30 days of a 12-month term.
  • The security deposit must be returned within 45 days of move out.
  • If the landlord will withhold money, they must provide an itemized statement of damages and the estimated or actual cost of repair within 30 days of move out.

Wow! That’s a lot of regulations to keep track of.

Seattle also has tough security deposit laws for landlords.

  • Landlords must return the security deposit within 21 days of move out or send an itemized list in writing for any withholding within 21 days.
  • If a tenant can’t pay the full security deposit at move-in time, landlords must allow payment to be in installments.

Many landlords, rather than risk a tenant lawsuit for possible noncompliance, are simply not requiring a security deposit.

2. Security deposit laws can cost you money

Using Chicago again as an example, if landlords don’t follow the very specific laws, the landlord must pay the tenant two times the security deposit in addition to the security deposit itself. And if a landlord loses a claim filed by the tenant, the landlord must pay the tenant’s attorney fees and court costs.

Ouch.

Some states are also strict with landlords who do not follow security deposit laws to the letter. California, for example, also awards tenants two times the security deposit in addition to the security deposit if the court finds the landlord acted in bad faith. Read your state laws, and you could be shocked.

3. The cost is burdensome to tenants

It can be difficult for tenants to come up with first month’s rent plus security deposit, particularly in high rent areas. If people can’t afford to move into your rental, you could have a difficult time renting it out.

Renters ought to be able to come up with first month’s rent. If they can’t, then they probably won’t be able to pay the rent each month. But adding a security deposit that’s equal to first month’s rent upfront could be tough on some people, particularly if there are other fees involved such as pet fees, utility deposits, and moving expenses.

If you’re finding most people are having trouble coming up with first month’s rent plus security deposit, you might not want to collect a security deposit.

If you don’t collect a security deposit, collect a move-in fee.

Landlords need protection when they rent out property, and that’s the reason for the security deposit. But some landlords collect a move-in fee instead.

You may say this is playing semantics—whether you call it a “security deposit” or a “move-in fee,” you’re still collecting money. But there are differences between the two. You should understand what they are so you can decide whether collecting a security deposit or a move-in fee better suits your situation.

About move-in fees

Most landlords who don’t collect a security deposit collect a move-in fee instead. The move-in fee is typically not subject to as many regulations as the security deposit can be. The reason is that the move-in fee is not returned to the tenant at move-out time. The landlord simply keeps it.

But the move-in fee is usually less than the security deposit. It’s designed to cover the cost of cleaning the rental unit, painting, and making minor touch-ups. Most landlords charge a percentage of the rent, such as 40 to 50 percent.

Which should you collect? A security deposit or a move-in fee?

If you live in a jurisdiction where the security deposit laws are complicated and the penalties strict, you might want to consider charging a move-in fee, dropping the security deposit altogether.

But if you live in a state with straightforward security deposit laws, you’re probably better off collecting the security deposit.

What about collecting first and last month’s rent?

Some landlords collect first and last month’s rent instead of a security deposit. That can get you off the hook for cumbersome security deposit laws. But doing so means you are protected only from a tenant who skips out on paying a month’s rent. You would have to pay for any damages out of your own pocket.

Related: Collect a larger deposit instead of last month’s rent

Bottom line

It’s generally a best practice to collect first month’s rent plus a security deposit. But depending on your situation, you might want to do things differently.

How to avoid rental scams

Written by Laura Agadoni on . Posted in edited, For Renters, Leases & Legal, paid

What could be worse than paying a large sum of money to secure a rental property, packing all your stuff to move, getting excited about your new home…and then finding out that you really didn’t rent the place?

Now you’re out all that time, effort, and money—and you have nowhere to live.

Rental scams, unfortunately, happen more often than you might think. Because it’s easy for anyone to advertise an apartment or house they have for rent online, you might not know whether the poster is legitimate.

Scammers typically do one of two things, according to the Federal Trade Commission (FTC).

  1. They take the photos and description from a real ad, change the contact information to their own, and place the doctored ad on another website. You see the ad and call or email the scammer instead of the real owner or manager.
  2. They make up a listing that doesn’t really exist, or they list a property that isn’t for rent. You call about that nonexistent property.

The scam, in both scenarios, is designed get you to pay first month’s rent and security deposit. Once you do, the scammer is long gone, with your money. Here are some ways to avoid those kinds of rental scams.

Related: Skirting a scam

1. Don’t wire money

The goal of rental scams is to try to get you to give money before you see the rental in person. A scammer’s preferred method is usually to ask you to wire the money. Why? Because wiring money works the same as handing over cash. (Oh, and don’t give cash!) You can’t stop payment or reverse charges when you wire money.

Never wire money to strangers.

2. Do an internet search

Search the listing address. You should find the same name of the owner or manager on every site. If you find a random listing or two with a different name attached to it, you can probably assume the listing with the different name is not legit.

3. Be firm

Scammers can be persuasive. Their job, after all, is getting people to part with their money. So con artists involved in rental scams often use high-pressure tactics to get you to pay right away. They usually tell people that if they don’t act immediately, they will lose out on a great deal. It’s not always a scam to rent a place sight unseen, but the practice is risky. It’s best to see a property before paying any money.

4. Be suspicious of a low price

It’s always fun and rewarding to get a deal, so when you find what appears to be a great bargain on a rental property, you might be tempted to plop down your money fast before someone else takes it. Or at the very least, you might contact this ad just to see if it’s really true. Once you do, however, the scammer will try to get money or at least some personal information from you in an effort to steal your identity. Unfortunately, if the deal looks too good to be true, that’s a waning sign of a scam.

5. Be suspicious of no screening

You know who’s interested in looking at your rental application, background check, and credit history? Real landlords who want to make sure you can pay the rent. You know who isn’t? Scammers who just want to take some of your money upfront and run. If you aren’t required to fill out an application and don’t need to agree to a background and credit check, be leery.

The right way to find a rental

  • View the property.
  • Apply, if you like the property. (Note that you can apply for a property before you visit it in person. You might need to do this in a competitive rental market. But the application fee is the only money you should pay upfront.)
  • Meet the landlord or property manager.
  • Sign a lease.
  • Pay move-in fees, which are typically the first month’s rent and security deposit. Look up your state’s laws to find out whether your state has limits on move-in fees.
  • Meet with your landlord or manager and get the keys.

Bottom line

Although you can reduce the chances of being a scam victim, you can still be scammed. If you are, call the police. You can also report what happened to you to the FTC.

And please share your story or any tips you have to avoid scams in the comments.

How to get your landlord’s approval to sublet

Written by Laura Agadoni on . Posted in edited, For Renters, paid, Rent & Expenses, Rental Advertising, Screening, Security Deposits

Permission to subletYou just found out you need to be away from home for an extended time. But you’re still in the middle of your lease period. Subletting your rental would be the perfect solution … but what will your landlord think?

Related: A renter’s guide to subletting your apartment

When you sublet, although you’re still a tenant, you act as a landlord by leasing your rental unit to someone else—a subtenant. Whether you’re allowed to sublet your rental is usually addressed in the lease, and you typically have one of three options:

  1. You are not allowed to sublet—game over, end of story. Don’t do it!
  2. You are allowed to sublet. Go for it—you have free rein!
  3. The norm—You are allowed to sublet only after obtaining written consent of the landlord. (Landlords typically want to screen subtenants.

But what if the lease doesn’t say anything about subletting?

A rarity, but if your lease is silent on the issue, check to see whether your state has any laws on the books about subleases. And more important, just ask your landlord.

Keep in mind that your landlord can refuse your request to sublet your rental, particularly if they have a good reason. With that said, there are ways to help ensure you get your landlord’s approval to sublet.

1. Find a suitable subtenant

It’s best to ask someone you know and trust. A dependable person you can rely on both reassures the landlord and gives you peace of mind that this person will uphold their end of the bargain—paying the rent on time, taking care of the property, and following all other lease terms.

If you don’t know anyone who wants to sublet, you can still find a suitable subtenant.

  • Tell everyone you know that you’re looking.
  • Post on social media and Craigslist.
  • Ask if your roommates will do the same—they’re the ones who’ll be living with this person, so it benefits them to find someone.

If you do post the unit online, make sure you list the benefits (basically whatever it is that you like about it). Also include photos, and of course, your contact information.

If you’re having a hard time finding someone, lower the rent or offer to pay utilities. Even if you need to subsidize part of the subtenant’s rent, it will be cheaper than paying all the rent and probably cheaper than breaking the lease.

2. Screen potential subtenants

You can sign up with Cozy as a landlord and have your subtenants apply. (If you are already signed up with Cozy as a tenant, you’ll need to use a different email address.) Request that applicants allow a credit and background check. This lets you know whether they have a criminal record and how they handle finances.

Ask for references, and call them. Ideally, you will speak with their employer and their current landlord.

3. Get your roommates on board

If you have roommates, make sure they’re okay with your subtenant. You don’t want to cause any drama before you leave by surprising your roommates with a stranger suddenly living with them. If your roommates approve your subtenant, have them sign a form stating so.

4. Draw up a lease between you and the subtenant

A written lease makes everything clear, protects both parties, and eliminates your-word-against-theirs types of scenarios.

Here are some must-haves to put in the lease:

  • The dates the subtenant will be renting the unit from you
  • The amount of rent they will pay
  • Whether they will pay the rent to you or directly to the landlord
  • Who will pay for utilities

Also provide your subtenant with a copy of your lease so they will know all the particulars of your rental situation.

A note about rent: You can continue to pay the rent to your landlord even if you have a subtenant, and your subtenant would pay you. This way, you know that rent is being paid. You can also choose to let your subtenant pay the landlord directly. But if your subtenant doesn’t pay, the landlord could evict you (unless you pay rent pronto plus any late fees).

It’s a good idea to ask your subtenant for a security deposit. A usual amount is half or a full month’s rent.

5. Put in a written request to your landlord

Let your landlord know that you are taking this matter seriously by mailing (or at least emailing) them about your sublease proposition at least 30 days in advance.

Here’s what to put in the letter:

  • Your reason for needing to sublet
  • The start and end dates of the sublease period
  • The proposed subtenant’s name and current address
  • Your address (or a way of contacting you) during the sublease period
  • A copy of the sublease agreement and any roommate approval form

6. Wait for your landlord’s response

If your landlord doesn’t respond in a week or so, follow up. If your landlord won’t respond or refuses your sublease proposal for no good reason, you may need to contact an attorney or legal aid.

7. Understand what you’re getting into

You are ultimately responsible for your rental unit.

If you choose a subtenant who is irresponsible and skips out on rent, damages the rental unit, or becomes a nuisance to the point of violating the lease terms, your landlord can come after you for the money.

Make sure you have a clause in your lease with your subtenant that states they will be responsible for unpaid rent or damages they caused. That way, if your landlord sues you or keeps your security deposit to pay what’s owed, you can then come after your subtenant or keep part or all the security deposit if you requested one.

Note that the expectation is to return your subtenant’s security deposit. If you do keep all or part of their security deposit, you need to provide a reason.

A subtenant could save you from paying rent for a place you won’t be living in or from having to break your lease. If done correctly, the arrangement could work out well for all parties involved: your subtenant, your landlord, and you.

If you have tips for subleasing, please share them in the comments!

How to spot fake pay stubs and credit reports

Written by Laura Agadoni on . Posted in edited, For Landlords, paid, Screening, Step 6 - Applications & Screening

Fake credit reportsAs a landlord, you need to make sure you rent to tenants who can afford to pay the rent and who actually pay their bills, so you naturally check pay stubs and credit reports. You are doing that, right?

The problem is that some people aren’t completely honest when trying to rent a property. They might pretend they make more money than they really do by giving you a fake pay stub. Or they might try to give you a doctored credit report to make them appear creditworthy when they really aren’t. So how can you make sure what you’re learning about potential applicants is true?

Look at more than just the pay stub

People can simply go on the internet and use a template to make their own paycheck stub. And these paycheck stub generator sites are super easy to find.

The result?

The pay stubs look official, and people can enter any information they like. You won’t be able to tell just by looking at this type of fake pay stub whether it’s the real deal or not. Here are four better ways to verify income:

  1. Request a W-2 form. Employers prepare this form, which shows an employee’s gross earnings, deductions, and taxes. It’s possible to fake W-2 forms, too. But it’s a much harder process and involves an entire criminal enterprise of tricking payroll personnel. W-2 forms are a more accurate way to verify income than pay stubs are. You are far more likely to get fake pay stubs than you are fake W-2 forms.
  2. Look at your applicant’s bank account. Check to see whether the deposits match what they say their income is.
  3. Call their employer. First, find out whether they work where they say they do. Then ask whether the employer can verify that the applicant earns what they say they do. Not all employers will verify salary, but they can at least let you know whether the applicant works there.
  4. Request form 4506 from the IRS. With this form, you can see a transcript of a prospective tenant’s federal tax record.

Always run your own credit check

If a tenant offers to give you a copy of their credit report to “save” you from doing this step yourself or because they say they don’t want to ding their credit with a credit inquiry from you, politely decline. Why? It’s easy to fake a credit report, too.

The remedy is simple: you need to request a credit report yourself. I use Cozy for this service, and it works out great. The credit reports come from Experian, one of the three credit bureaus. If you use Cozy for your tenant applications, you can request that Cozy require all applicants to agree (and pay for) a credit check and a background check.

And bonus: Just letting applicants know that you use a screening service is itself a way of screening tenants. Applicants who can’t afford your place will probably move on or will be upfront with you about anything negative you might find.

Related: 6 Ways to Handle Applicants with Bad Credit

Bottom line

It would be nice to be able to instantly spot fake pay stubs and credit reports. But that just isn’t possible in many cases. You need to verify information by crosschecking and, ideally, using a screening service such as Cozy.

Should I increase rental rates every year?

Written by Laura Agadoni on . Posted in edited, For Landlords, Income Ideas, paid, Rent & Expenses, Step 1 - Perform Research

Raise the RentI know a landlord who charges less than any other rental around, never raises the rent, and is happy about it. He rarely has tenant turnover, but he isn’t making any money, either.

Then again, I know a renter who wanted to stay in her rental at least another year, but the management company informed her of a $200 rent increase to renew. She left that place so fast the property managers didn’t know what hit them. A vacancy, that’s what.

There’s an art to striking the right balance between making money on your rental properties and alienating good renters. We’re here to help you hone your art.

Related: How to Raise the Rent in 4 easy Steps [Free Template]

Why rent increases are a part of life

When expenses for owning property go up, raising the rent is necessary to just maintain the bottom line in your rental business. We’re talking expenses for which you have no control:

  • Property taxes
  • HOA fees
  • Mortgage payments with an ARM
  • Utilities
  • Landlord insurance
  • Property management fees

Add in expenses for which you have some control but are still expenses nonetheless:

  • Maintenance (lawn care, pest control, gutter cleaning, etc.)
  • Repairs (appliance repair or replacement, plumbing issues, tree removal, etc.)
  • Vacancies

If you don’t raise the rent when your expenses go up, it’s like taking a pay decrease. Not too many people do that. If the thought of raising the rent at lease renewal time makes you queasy, just run the numbers to determine whether you must increase rent just to maintain your cash flow.

Your expenses don’t determine rent

Higher expenses might be the reason you need to increase rent. But the market ultimately decides how much rent you can charge. If you need to charge more for rent than what comparable units in your area charge, you probably won’t get it. If that’s the case, you should reevaluate whether it makes sense holding onto that property.

You are allowed to make money

You can raise the rent even if your expenses have not gone up or—by some miracle—have decreased. Being a landlord is a business, and the purpose of being in business is to make money. If your rents are lower than area rents, and your property is in comparable shape to those higher-priced rentals around you, go ahead and raise the rent to be on par with the other rentals.

How much of a rent increase is good?

Remember my friend who left her rental and found another place to rent because of the astronomical rent increase? Don’t be that landlord. The $200 increase represented 16.67 percent of her rent. A better yearly rental increase that most people can handle is in the range of 3 to 5 percent, or in this case, a rent increase somewhere between $36 and $60. Most renters probably won’t leave if the rent increase is slight.

When you can’t raise the rent

If your rental property is rent controlled, or if your jurisdiction has a statute limiting rent increases, you must comply with the law. You might not be able to raise the rent as much as you like—or at all.

You also cannot raise the rent on a fixed-term lease during the lease term, so if your lease agreement is for two years, for example, you cannot raise the rent after one year. You must wait until lease renewal time to raise the rent. On a month-to-month tenancy, you need to give proper notice per your state law before you raise the rent. This is usually 30 days, but check your state law first.

If you really can’t bear to raise the rent

If you are like that landlord I know who charges less rent to decrease turnover, that’s fine if you’re happy with the arrangement. But as soon as that tenant moves out, consider getting the market rate for your rental property.

Cozy rent estimate

If you want to find out the rent prices in your area, I recommend using the Cozy rent estimate tool. There’s a slight fee involved, but if you find out that you can get more for rent than what you were planning to charge, this cost pays for itself many times over. Or you might find that you’ve been asking too much; hence, the difficulty finding tenants.

Here’s how the Cozy rent estimate works. Note: the whole process is complete in a minute or two.

  1. You fill out the particulars about your property. (If you already have your property stored in Cozy, this information auto fills for you.)
  2. You pay.
  3. You immediately get your rent estimate for your property.

You can then view the six-page report for a detailed analysis of how Cozy arrived at your rent estimate. Here are some highlights of what you’ll see:

  • High and low rents for your ZIP code
  • Days on market vs. vacancy for your county
  • Addresses of comparable homes and the rent other landlords charge (my favorite section)
  • Rent trends

View a sample Cozy Rent Estimate report.

Bottom line

If you know what comparable rental rates are for your area, you can feel confident in what you charge for rent. There are no rules (except if your property falls under rent control) on how much you should charge or whether you should raise the rent each year. But it’s always easier for renters to handle a slight rent increase each year than a one-time ginormous rent increase.

How to rent your former home

Written by Laura Agadoni on . Posted in edited, For Landlords, paid, Rental Advertising, Step 2 - Find & Buy a Property

communicationRenting your former home will be easy, right? You know all there is to know about the house, so showing it to renters should be a snap. But something could get in the way of your success …

Your emotions.

That’s right. If you spent any amount of time living in your home, you probably have an emotional connection with it.

But if you plan to rent your former residence, even though you’ll still own the home, you’ll need to emotionally detach from it. It may still be your house, but it’s not your home anymore. And there’s a big difference between the two.

What used to be your residence—your home—is now your investment (rental) property. Here’s how to transition from a home you loved to a house that’s strictly for business.

1. Hold onto memories

You probably have some fond memories of your home—family gatherings, growing a backyard garden, hosting dinner parties, etc. You will always have your remembrances, and you should cherish them.

Appreciate that you have feelings for the home. That’s huge, so just sit with that for a bit. Understanding and getting in touch with your feelings should help you achieve your goal, which is renting the property.

To successfully rent your home, however, you need to get into the right mindset, and let go of your home. Otherwise, you might subconsciously sabotage your efforts of renting the place.

How? Here’s one way: Since it’s your home, you likely think it’s worth more than it really is. So you might ask too much for rent. By doing so, you might have a difficult time finding a renter.

Tip: Use a Cozy Rent Estimate report to help you determine the right amount to charge for rent.

Related: How to set the rent price for your rental properties

2. Set a numeric goal

Run the numbers to see the potential for making money from your former home. Being able to count on clearing an extra $500 or $1,000 a month, for example, should make it easier to help you view your former home as a business.

3. Picture what it will be like

Visualize renters living in what used to be your home to get used to the idea. Don’t be territorial. As soon as you get a signed lease or a month-to-month commitment—and first month’s rent and security deposit, of course—get comfortable with the idea that you no longer have access to the home as you once did. Let your tenants live in peace. This is the law, by the way. It’s called giving your tenants “quiet enjoyment” of the premises.

Note: You should always be able to enter your house. You, therefore, need a key to get in. It’s wise to change the locks before a tenant moves in and to keep a key for yourself.

Related: Lock lock, who’s there? The rules for changing locks

You can show up at the property for the following reasons:

  • Emergency situations (no notice needed)
  • To make regular maintenance and safety checks (with notice)
  • To show the property for sale or rent (with notice)
  • To make repairs (with notice)
  • To check on the property if the tenant will be away for an extended time

Make sure you have a section in your lease that lists the times you can enter.

4. Neutralize the home

You probably have personal touches around the home, what people on HGTV refer to as “putting on their stamp.” That red dining room or bright blue child’s room might have made you happy, but you must move on if you want to rent the place. Neutralize your home, and remove your “stamp.”

Why? Two reasons:

  1. Neutralizing the home helps you detach from it. It will seem less like your home and more like a home.
  2. You make the house show ready by neutralizing it.

Here’s how:

  • Remove all your personal belongings and furnishings
  • Clean it
  • Paint neutral colors
  • Repair all the quirky stuff you became used to (leaky faucets, doors that don’t close all the way, stuck drawers, dated light fixtures)

5. Advertise the house for rent

Once you’re emotionally ready and the house is physically ready to show, advertise it. I use Cozy, Apartments.com, and Craigslist to get this done. Once you start receiving interest, set up some showings. Be sure to screen tenants by requiring a credit and background check. (I use Cozy to get that done.) Then interview people who meet your criteria.

6. Stay away after you have a renter

No matter how tempted you may be to stop by the house and let yourself in, don’t do it. Once you’ve accepted money from someone, you no longer have the right to come into your house whenever you please. There are times when you will need to come over, but make sure you do this the right way.

This article explains how: Can a landlord enter the property whenever they want?

The bottom line

It can be difficult to turn what was once your home into an investment property. But after the initial difficulties, you will appreciate that extra money your house brings in and learn to let go of your former home.

PayRent.com