Renting Out Your Home in Sacramento: Everything You Should Consider
Thinking of renting out your house in Sacramento? Well, from a financial standpoint, it can be a great idea to have a rental business and its's rental income. Having an additional income stream from rent can help you, as a landlord, diversify your earnings, pay down your mortgage faster, and help you achieve financial independence faster.
However, renting out a property house goes beyond just cashing out the rent income check from your renters every month. In fact, becoming a landlord can be a daunting and stressful task. Landlords need to know about collecting security deposits, drafting a lease agreement. marketing your property listing, screening renters, setting your rent price, and creating a property management plan.
If this is your first time renting out your home, the following are important things you should know about.
7 Tips for Renting Out a House in Sacramento
1. Make a Financial Plan
Rental property owners must have a financial plan before welcoming renters. This will help you know whether or not to renting out your house will be financially worthwhile or not. For your investment to be profitable, the income from renting must exceed the expenses. So, make sure to factor in things like mortgage payments, maintenance, repairs and upgrades, property house taxes and landlord insurance.
Income from your rented property house is taxable income, and can become tax deductions, meaning a lot of expenses can be written off. Make sure you keep track of expenses and keep records so you're ready come tax season. Consider contacting a professional for a free rental pricing analysis on your rental property.
2. Calculate the Rental Rate
Before you rent out your Sacramento property, you’ll need to calculate and determine the rental rate. How much monthly rent you, the landlord, charges potential tenants can be the difference between having a vacant unit and having stable income every month. When figuring out how much rent money to charge, a landlords goal should be to find the right rent price for the tenant to pay, that is neither too high nor too low for the property. Ensuring tenants can pay rent on time.
There are two ways to do this. The first option is that the landlord can do it on their own. Landlords can conduct neighborhood research or interview area landlords to figure out how much similar properties rent for. The other option is to simply hire a professional, such as a property management firm like Peak Residental.
3. Draft a Lease or Rental Agreement
A lease is a crucial document for landlords. The lease can help minimize confusion or misunderstanding between you and your tenant during a tenancy.
There are certain terms that a landlord should include to make a foolproof lease agreement. For example:
- The rent price, when rent becomes late, and where the money is payable
- How much security deposit the tenant must pay
- Whether pets are allowed on the property
- Who is responsible for certain maintenance requests for your properties.
- The limits of occupancy should be included in the lease.
- Requirements before breaking a lease
- The landlord’s right of entry
- Included Utilities as per the lease.
- Behaviors that will warrant the eviction of the tenants from the property
It’s crucial that the lease agreement is legally binding. Once you’ve drafted the lease agreement, have a professional go through it to ensure it abides by all local laws. Alternatively, just hire a qualified property management company to draft the lease for you it benefits the both of you.
4. Have a Management Plan in Place
Being a landlord comes with a lot of responsibilities. Tenants might call at 2 A.M. about a pressing maintenance issue, for example. You also need to know what your responsibilities are regarding providing habitable living and knowing you rent our your home to a high maintenance tenant. If these responsibilities seem daunting, then consider hiring a professional to do them for you. An experienced management company can help you meet all your responsibilities under the lease agreement.
5. Know What the Law Says About the Landlord-Tenant Relationship
Just like other states across the country, California has a landlord-tenant law in place. As a landlord, you must abide by it. As a landlord, you have an obligation to respect your tenant’s privacy and fully understand and the landlord tenant laws.
Before entry, you must always notify your tenant beforehand. Specifically, California law requires landlords to give “reasonable notice” prior to entry to their tenants. 24 hours is presumed by law to be reasonable. What’s more, the reason for the entry must be reasonable as well. The following are legitimate reasons why a landlord in California may want to enter the tenant's unit.
- To show the unit to a potential tenant, someone interested to purchase the property house or lenders
- To show the rental house to workers or contractors
- In an emergency
- To conduct the necessary or agreed upon repairs
- During walk-through the rental unit inspections to evaluate any damage done to the unit
No notice is required to enter during an emergency, under court orders or in the case of any rental property house abandonment by the tenant. Besides the law on landlord entry, there are a lot of other laws, like fair housing act, that you also have to abide by. They include the Fair Housing Act, the Warranty of Habitability, landlord tenant law, Security Deposit, and the Fair Credit Reporting Act.
6. Ensure the Property Is in a Good State of Repairs
You’ll want to make sure that all your rental properties are attractive to potential tenants. If it’s in a dire state of disrepair, you’ll have a hard time convincing potential tenans to rent it. And the longer the unit remains vacant without a tenant, the more money you’ll lose, which has no benefits and the larger the chance that squatters may try to occupy the unit.
So, go round the rental property house and check that everything is up to par. Are lights and switches working as they should? Are there any leaky faucets? Is the heating and cooling system functioning properly? What about the smoke and carbon monoxide detectors? Try to discourage squatters, but be sure to know their rights if you do end up encountering some in the property or house.
7. Have a Plan on How You’re Going to Market the Property
To avoid vacancies, you must analyze the local rental market, as marketing your rental property house properly is essential. Knowing your target tenants can help you tailor your marketing strategy to reach as many high quality tenants as possible.
Before marketing it, stage it to ensure it looks its best. Then, use a combination of both traditional and conventional marketing tactics to get the word out to prospective tenants.
Bottom Line
There you have it. Seven tips for successfully renting out a Sacramento rental home. If you find it daunting, seek help from a property management company, Peak Residential, Inc. Property Management! Our experienced rental property managers offer a comprehensive suite of services can help you in all aspects from marketing to collecting rent.
Our company will make renting your home a dream!
