How to rent your Chattanooga house. With careful minded sober thinking and fear.
I attended a wedding Saturday. A young man named Todd asked me, “so … how is the real estate market?”
I told him and his father-in-law my observation of the market, as I did in this blog post. He then went on to tell me they had been trying to sell their home for 6 months. They were thinking about renting it out and going on to their next home.
I urged him to carefully consider 4 things as he was thinking about renting his personal home.
1. Do not treat this as a band-aid. Treat this as a business venture, because it is! A serious business move. You may have already invested in this for several years now. Some of the biggest landlord regrets: A. Business with family, B. Shallow screening of tenants, C. Poorly written agreement, D. Lack of understanding of Landlord/Tenant Federal and State law.
2. Place ability to monthly “inspect” property to spot check maintenance, and upkeep. Savvy landlords put monthly air filter maintenance scheduled in their agreements. Treat the tenant with respect for their right of enjoyment of the property, but retain the right it visit for monthly “inspections”. Phrase it to tenant as a service for them.
3. If you are not planning to purchase additional rental properties, there is no need to start a corporation or LLC. It is not worth the expense.
4. Ask a few professional landlords who they use in your county for eviction and collection attorneys. Also ask them who they use as an insurance agent for landlord risk insurance and umbrella coverage. You also need some good CPA and tax advice.
The biggest mistake I see people make when they “rent their house” is not understanding the liabilities of starting a business venture that is dealing with the public. You are held to the same Federal, State, County and City laws as the big boy landlords.
This is a good market for renting your property. But for heaven’s sake, please treat this home and your time with respect. Because renting a home is a business. If you are not prepared to take on a part time property management business, then consider dropping your price and selling. If you are wanting to take this challenge then perhaps you need to consider taking on a few more after cutting your teeth on the first one. Pretend you are starting a new business, that is how you rent your Chattanooga house.