When a buyer is choosing their new home, there is sometimes consideration of its potential value as an investment property, should the owner choose to rent it out in the future. But what does it mean to become a landlord, where do you start, and what do you need to consider?
The best first step is to speak with a local real estate agent that is experienced in both leasing and sales.
If and when you decide to rent your home, your agent can help you navigate the process and find great tenants. Some of the things our can agents do:
- Visit your property and take photos for listing and marketing.
- Recommend a rent amount based on a market analysis.
- Advise on decisions such as renting it furnished or unfurnished, whether changes/improvements should be made to attract rents, etc.
- Market the availability through multiple channels to identify prospective tenants.
- Schedule and show the home to prospective tenants.
- Provide you with rental applications, proof of income, guarantor forms (if applicable), credit history checks and landlord references.
- Assist in the preparation of the lease and other relevant documents.
Below are a few other important considerations:
Renting Out a Condominium: If your property is a condominium, read through the association’s rules and regulations to make sure rentals are allowed and/or whether there are any restrictions on renting. For example, some associations allow renting, but restrict it to 6 month or 12 month minimum lease terms.
Rental Cycles: In our market, there are very distinct rental cycles and choosing to have your lease term follow one of those cycles can help minimize your vacancy risk. The two most popular rent cycles are September 1 and June 1. July 1 has also been popular, particularly with the medical community since it aligns with when many doctors begin their residencies.
In terms of June 1 vs. September 1, some landlords opt for June 1 since it is less busy so it is easier to line up cleaning, repairs and other services, and if longer repairs are needed and the apartment needs to be vacant for a period, they are still in good position for the July 1 or September 1 lease cycle. Other landlords prefer September 1 since that is the largest moving day, so they have the largest pool of prospective tenants to market the apartment to when the lease ends.
Students: Decide whether or not you will rent to students (provided the building’s rules and regulations allow that, if you own a condominium). Given the large number of schools in the Boston area, most landlords accept graduate students (often with cosigners) and many accept undergraduate students as well (also with cosigners). However, that is a choice the landlord must make.
Pets: Decide if you will accept tenants with pets. Discuss pros and cons with your agent, and refer to your association’s rules and regulations if you own a condominium. It is important to be aware of the differences between pets, service animals and support animals.
Registering: Some municipalities, including Boston, have a registration requirement for apartments. Be sure to register with the City/Town if that is required.
Property management: If you are very busy, travel a lot, live outside of MA or simply do not want to have to field maintenance calls from tenants, you can consider professional property management. Our Property Management team offers services such as receiving rent payments, fielding maintenance calls, dispatching contractors and bill payment.
Choosing to shift your home into an investment property can be a difficult decision. With years of experience, we are here to help. Feel free to contact us to begin a dialogue.