Getting a rental property or making your house into one is a great way for an extra source of income. However, to qualify for being a rental property, there are some criteria both physically and financially to be met to bring out the most from your property. Before taking any step, read below the useful information brought to you by our experienced property advisor in Melbourne, to turn your home into a rental property.
Insurance
Having a homeowner’s insurance of your home isn’t all that you need to make it a rental property. You have to take some responsibility for the safety of people, who live in your property. The possibility of any mishap can’t be denied and in case if it happens, having the right insurance policy will help you in the reimbursement for lost rental income and extensive damages.
Permits
The requirements can differ by locality, but a permit is mandatory for a residential property serving as a rental property. Its purpose is totally safety oriented. Often, a government inspector is assigned to inspect the property for various safety hazards including emergency exits, electrical, heating, and other safety and health concerns. This inspection is essential but isn’t very expensive.
Repairs and Upgrades
It is also necessary to keep your property well maintained and in proper condition, anything you upgrade or repair gives it an edge over other rental properties in the vicinity. Ensure that the property is clean, newly painted, and anything which requires repair or replacement should be done before you put it on a list. Also remember, the costs of the upgrades add to your rental rates so don’t go overboard.
What Will You Charge?
Find out all the costs and the monthly profit you would like to get. Remember to add premium into your costs for any repairs you made in the property during the lease. Once you have calculated a rental rate, check rental rates in the nearby towns and compare whether yours are not much higher or lower than others.
Finding a Tenant
Before you start your hunt for tenants, educate yourself about the Fair Housing Laws and run a credit check on prospective renters. Finding out who is a perfect tenant can be challenging. It wouldn’t be appropriate to judge them on their caste or race. There is never a perfect renter and second, your intuition can be wrong. You can take help of an attorney if you plan to make a customized application and contract, and rental paperwork can be completed with the help of a property management group.
If you are planning to start your journey of property investment and need some professional advice, reach out to our expert financial advisor in Melbourne at 10 Properties in 10 Years. Our team of experts will guide you step-by-step according to your plans and provide you all information you need to succeed. To get in touch, give us a call at +61 452 238 490 or leave us a message at [email protected].
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