Do you want to earn a passive income by investing in rental property? If you do, property rentals can be a great option for you. If you can put in a little time and effort at the beginning, a house you already own can become a way to make passive income and increase your savings.
Phoenix has a great rental market. The city is growing, bringing in more people and more demand for housing. Becoming a landlord is challenging, but by following the right path, you can maximize your profits.
Keep reading to find out more about the process and tips to rent out your house.
Process of Renting Out a House in Phoenix:
- First, you need to prepare your house for renters. Clean the house thoroughly and make sure all the included appliances are in good condition.
- Learn landlord-tenant laws in Arizona. Getting familiar with landlord-tenant laws helps you understand your rights and duties.
- Consider market research to determine fair rent prices. Keep an eye on what other landlords are charging around your neighborhood and community.
- Draft a rental agreement. You may want to consult an attorney or experience property manager for this.
- Use the internet or print media to advertise your house. Find and screen tenants and choose the suitable one.
- After carefully screening tenants, arrange a tour for selected tenants to show your house.
- If you want to make your house-renting journey easier and avoid all the above steps, consider hiring a property management company.
Tips for Renting Out Your House:
Follow these seven tips to make the most out of becoming a landlord in Phoenix.
1. Learn landlord-tenant laws:
Before renting out your house in Phoenix, it is crucial to learn about landlord-tenant laws. Learning and following these laws will not only make you aware of your rights and duties, but give you true peace of mind.
You should learn all these laws including security deposit rules, the Warranty of Habitability, and Fair Housing law.
According to the Security Deposit rule, you can collect a security deposit equal to one and one-half month's rent. You need to return the deposit within 14 days once the tenant moves out.
You should also treat tenants fairly as per Fair Housing Law which protects renters against housing discrimination.
You need to know landlord-tenant laws in your state. This is because laws protect your and your tenant's rights and ensure fair treatment for both parties.
2. Hire professionals
You need to abide by tax laws and state laws for renting out your property. For this, hire a real estate attorney or an accountant. Hiring professionals for property management is like getting help from peers to complete a project easily.
An attorney will help you navigate the legal side of housing laws and help you to handle tough situations like landlord-tenant disputes and eviction. An accountant can assist you in filing taxes and let you know about any tax deductions you qualify for.
You can also hire a property management company that will assist you in finding renters, collecting rents, drawing up leases, handling maintenance requests, and managing the legal aspects of your property.
3. Find the right tenant
When your house is ready to rent out, screen tenants carefully. You already know a good tenant makes the landlord's life easy by being responsible, paying rent on time, and avoiding creating disturbance around the community.
For screening tenants, confirm renters' credibility: contact renters' employers and past landlords as a reference. See if tenants have good credit scores with no criminal or eviction history.
After the screening process, you can ask for a security deposit from a selected tenant. In Phoenix, you can collect a security deposit equal to one-and-a-half months’ rent.
4. Consider rental home insurance
Having rental home insurance is not required but considering it can protect your interest. You can cover the structure damage, liability costs, legal costs and more through this insurance policy.
For your own home, you need a homeowners insurance policy and for your rental house, you need a rental home insurance policy.
You can also request your tenant to consider renters insurance to protect their interest too.
5. Understand your responsibilities
It is important to understand your responsibilities as a landlord. You need to provide a habitable housing unit to your tenant. Fulfill repair requests within 10 days of notice.
However, in case of delay, a tenant can make repairs themselves and can deduct the expense from future rent keeping the deduction amount limit in mind.
Other responsibilities include paying attention to the tenant's housekeeping skills to avoid wear and tear on the property, receiving rent on time, and filing tax accurately during tax season.
6. Draft a rental agreement
In Arizona, you can have rental agreements in written or verbal form. However, having a written agreement is more authentic in law.
Here are some aspects to include in the rental agreement:
- Agreement starting and ending dates
- List of people who will live in your rental property
- Address of your house and brief details about it
- Include your name and contact information as well as the tenants' information
- Include rental amount and rent collection policies
- Include the security deposit amount
As the owner of rental property, you can include some conditions and boundaries to protect yourself from additional liabilities.
7. Start marketing the house
Spend some time marketing your house. You can use different platforms to advertise your house. Post ads on online listing sites and local newspapers.
Write a captivating headline and description that will highlight key features of your property. This will drive the attention of renters.
Other methods of marketing are posting ads on social media, word of mouth, and putting the sign "For Rent" outside your house.
Bottom Line
If you do not want to spend unnecessary time renting your house or feel stressed about handling your rental property, hire a property management company.
A property management company takes the burden off your shoulders and handles the screening of tenants, collecting rent, and the legal side of your business.
Contact us here at Service Star Realty and find out how you can get started today!
Service Star Realty
2929 East Camelback Road #119, Phoenix, AZ 85016
(480) 426-9696
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