Protecting Your Investment: Renting Out Your Investment Property for the First Time
Renting out an investment property for the first time has to potential to fill you with trepidation. While the property will end up becoming the home for someone who is yet to be determined, it's still your property and it represents a sizeable financial investment. Naturally, you'll want to do your utmost to protect this investment. This comes down to tenant selection, and other necessary measures that keep your investment as safe as possible.
Finding a Renter Yourself
When listing the property and assessing potential renters yourself, a reference from a previous landlord can be beneficial, although this might not be possible with a first time renter. Employment verification is also of assistance, essentially confirming that a potential renter is in fact employed by the company and in the capacity they've stated. This doesn't give you an insight into their other financial obligations or difficulties, but at least allows you to make an educated guess as to whether they are able to meet their financial obligations to you. Rent collection should always be via direct debit so that the process is both automated and regulated.
Using a Property Manager
You will be required to pay a fee for their services (usually a percentage of the rent), and yet you might find more peace of mind by obtaining a property manager (which might be handled by a specific department of a real estate agency). They can locate a suitable tenant; perhaps from a pre-existing list of vetted clients looking for homes to rent, arrange rent payments, maintenance and act as an intermediary in the event of any issues.
Adding Protection for Your Investment
While the bond that a renter pays acts as a surety against any damage they might cause, this will not act as protection against any damage outside their control. Landlord insurance can be vital in protecting your property against any accidental damage that would have been difficult to foresee and take preventative action against. Some policies also come with liability options, as in protecting you against any negligence claims filed by a renter. For example, they might allege that a lack of maintenance contributed to property damage which might have injured them or damaged their personal possessions.
By doing it right from the get go, you should be able to locate and retain a suitable renter who will meet their financial obligations and care for the property as though it was their own.
