José R. Hernández
Four Easy Steps to Rent Out Your Inherited Home.
Inheriting a property is sometimes a long and difficult process. Before you even think about renting it, you should have already empty its contents. Everything not to remain with the new tenants should be divided between relatives, sold, or donated to charity. Try to accomplish this task ASAP. The longer it takes you, the harder it'll become.
Is the house legally yours? It might seem like an odd question, but this is the first item on a Property Manager's checklist. Sometimes several siblings inherit the same property but disagree on a course of action. People have invaded homes in more nefarious circumstances and later tried to rent them out through property management companies. For practical reasons, you should know who is in charge of paying the debts the property might have accumulated and who will eventually receive the rental income it generates. A reputable Property Manager won't put her reputation on the line by taking on a rental assignment without proof of ownership. After you have requested a Management Quote or a Rental Assessment, her first order of business will be to check county records to verify the property's status. If you have doubts or questions about how to proceed, let the Property Manager know. As long as you selected a respectable Property Manager, you'll get the help needed.
Does it have any outstanding debts? Having gone through the process myself, I know some inheritances are long and drawn-out processes. During that time, bills accumulate. Among the main ones you should check first are mortgages, property taxes, HOA fees, home insurance, and utility bills. Make sure water and electricity are current and connected. They'll be necessary for accomplishing other steps down the line.
When was the last time the home received any love? Nobody can spect to collect top dollar on a home that is not maintained correctly. Yard upkeep and a thorough cleaning are no brainers but don't run to your favorite box store or general contractor for significant upgrades just yet. There are easy upgrades to increase your property's rental value without spending an arm and a leg. Read the article on the link, or better yet, talk to your property manager. She'll have a good idea of the improvements needed to maximize your specific property rental value.
Do you have experience managing properties, or are you interested in learning? Among the tasks you'll have to perform to rent a property are tenant qualifying, maintenance, rent collection, property showing, accounting, and marketing. You will have to deal with different vendors like real estate photographers, plumbers, HVAC technicians, and electricians, to name a few. You'll also need to list your property on various websites if you decide to do it independently.
If, on the other hand, you choose to hire a Property Manager, your life much be much simpler. They usually have a more comprehensive selection of vendors because of the number of properties they handle. A reputable Property Manager will also pass down to you any discounts she receives from her suppliers. The hiring cost varies depending on the company, but you should allocate around 70-100% of the first month's rent and 8-12% of subsequent months. Also, make sure you interview your prospective Property Manager and get to know her by asking plenty of questions. You are getting into a long term relationship and want to make sure it's the right one for you.
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