If you own a townhouse that you no longer want to live in yourself, but instead want to rent out townhouse, you need to make sure that you are really ready for the process. Here are four things you need to do to prepare yourself for becoming a townhouse landlord.
#1 Learn About Your Rights & Obligations
The first thing you need to do is make sure that you understand all of your rights and obligations as a landlord. One of the best ways to learn about your rights and obligations, as well as the rights of your future tenants, is by speaking with a property attorney. They can help you learn about and become informed about the rights and obligation of tenants and landlords.
You need to know this information because once you become a landlord, it is expected that you know what you are obligated by law to do. These laws can vary a lot from one state to the next, so talking to a local property or real estate attorney is a great way to make sure you are current and up-to-date about all local laws.
#2 Use A Screening Service
Second, although you can just put up an online classified advertisement for your townhouse, if you are trying to find a specific type of renter, you may want to use a screening service instead. A screening service will help you perform background checks on potential tenants at an affordable rate. Using a screening service will help you ensure that you don't rent to someone who has a criminal record, been evicted through the court system or has a very bad credit score from unwillingly becoming your tenant.
Using a screening service is a great way to protect your property and help ensure that you get a quality tenant. However, remember that it is only a tool within the screening process. You may want to do your own reference checks as well.
#3 Budget For Your Townhouse
Just because you are renting out your townhouse doesn't mean that you no longer have to pay for anything in relation to your townhouse. You need to make sure that you always have enough money to pay the mortgage, insurance, and bills for the townhouse for a couple months if you don't have a tenant to pay those costs for you. You also need to make sure that you budget for taxes and save money to pay for them.
Additionally, you need to have a money fund just for repairs. If something breaks down in your townhouse, you are generally obligated to fix it as soon as possible now that you are a landlord. You can't put off repairs or budget for them like you would as a homeowner; you need to be able to address issues that come up with your rental property right away.
Before you start renting your townhouse, make sure that you understand your rights and obligations as a tenant as well as tenants' rights. Be sure that you have a savings fund to cover necessary expenses associated with the townhouse and find a screening company to help you find quality tenants. Speak with a real estate agent for more information.