Getting market rent
As was mentioned earlier, you’ll want to do your research as to what constitutes market rent for your specific area at any given time. Once you’ve determined what you want to ask for rent, you’ll need to start the search for your tenants.
Using a Realtor
You can use a local Realtor to list your rental. Most areas have realty agencies that tend to specialize in rentals versus sales work. While this is one of the easiest ways of finding a tenant, it can also be great for screening the best tenants. Realtors will routinely run credit checks for you, and can even pre-screen potential tenants for you by checking on their references. However, you can expect to pay them a full month’s rent for their services (which the listing realty office will usually split evenly with the realty office that brings the new tenant). If you have relatively low turnover, this method for finding tenants can be excellent. However, if you have a tenant population that’s turning over every year, this can be a rather costly way of doing business.
Other ways to find tenants
Of course, you can also try to find tenants on your own. You can place “for rent” flyers in local supermarkets, laundromats, libraries, coffee shops, post offices – basically any location that might have a bulletin board available for prospective tenants to see.
You can also place ads in your local Pennysaver publication. Not only will they have a printed version, but they’ll usually have an on-line version of the ad as well. You can also place on-line ads on your local Craigslist, Hotpads.com, or other rental sites. Ad costs are minimal for these forms of advertising for tenants – but you’ll have to field all the calls, sets up all the showing appointments, and follow-up with each prospective tenant as well. You’ll also have to ultimately screen them yourself by asking for their credit and references, and check them out on your own.
Once you’ve chosen a tenant, make sure you’re clear as to the security deposit you’re looking for. Usually landlords will ask for 1 month’s security deposit. But if you’re feeling particularly skittish, you can ask for 1 ½ or 2 months security. But keep in mind that most potential tenants will be turned off by your extra need for “insurance,” and they may be unable to afford the extra month’s security, and you will be limiting the pool of available tenants by doing so. Don’t think that just because a tenant can afford that extra month of security, he’ll automatically make for a better tenant.
Also keep in mind that though you’re asking a particular amount for rent, a potential tenant has the right to make you an “offer” for a lower amount. That’s perfectly acceptable. You simply need to decide what the market conditions are like, and if it’s worth it to negotiate or not off your asking rent. In a slow market, obviously it will be. And in a hot market it won’t.
In addition, once you’ve chosen your new tenant, you’ll want to agree on the term of the lease. Most leases tend to be one year in length. Some can be two years. And some rentals are simply “month to month,” meaning there is no set time for a tenant to stay – and you will be required to give them their security deposit back with only a month’s notice.
Make sure you have a standard lease all ready to be signed once you’ve selected your tenant. There are standardized leases you can purchase at office stores, or on-line. If there is any item that’s specific to your rental, you can type up a separate “rider” page for these items (for example, that the tenant will be responsible for shoveling his own private walkway and steps in the winter).
photos courtesy of dimensionshomepage.com, rentalcerts.co.uk, quincyma.gov