One unintended consequence of the recent economic unpleasantness has been an explosion of owners who buy a house and then can’t sell their existing home. Rather than lose the home to foreclosure, they decide to offer it for rent, becoming a reluctant landlord.
If you have never rented your home to another person, you need to know there is a lot more involved than simply putting up a “for rent” sign. Local, state, and federal laws have plenty to say about it.
Here are my top ten suggestions to get Georgia landlords pointed in the right direction:
1. Call your insurance agent before you do anything. Make sure your homeowner's policy allows you to rent the house to others, and that you will have coverage for liability that may occur as a result of your being a landlord instead of an owner-occupant.
2. Check out the competition. Visit homes for rent in your area that are similar to yours, then compare your home to several others. Is it in good enough condition to be on the market, or do you need to make repairs first? Also, set your rent based on what the market will bear, not on what you need.
3. Prepare an information flier with a photo of the house and basic information. Bedroom and bath count, features like full basement, updated kitchen, and fresh paint will attract potential renters. Add your contact information and your rental rate, then distribute it to neighbors, bulletin boards, and employment centers near your home.
4. Put up a large, easy-to-read sign that says FOR RENT and has a phone number people can call for information. Consider a classified ad in the local newspaper and a listing on craigslist.com. Your phone should start ringing. If not, repeat step 2.
5. You will need a lease agreement. There is no shortage of rental agreements out there, and most are adequate. I really wish you would call a real estate attorney for advice, but I know you probably won't. Make certain the lease is designed specifically for the state of Georgia. No two states' sets of real estate-rental laws are alike. Make sure you have read the lease and understand it.
6. Get a written application. You can find generic rental applications on the Internet.
7. Screen your applications and get a full credit report on each adult applicant.
8. Know from the beginning that your tenant is likely to not pay exactly as agreed. It's a fact of life for all landlords. The most important thing I can tell you is to treat your rental like a business, not a hobby. A tenant who senses weakness or charity on your part will try to take advantage by not paying the rent. Hire an attorney if your tenant is late even ten days. Period. No exceptions.
9. If the home was built before 1978, federal law requires a "Lead Based Paint" disclosure form. In addition, state and federal laws prohibit housing discrimination. My advice is to rely completely on the credit report, credit score, and leasing recommendation, and tell all applicants that up-front. That way, it is less likely you will face charges of discrimination.
10. Finally, if all this is scaring the heck out of you, I recommend you call an experienced property manager to handle the rental process.
The Georgia Department of Community Affairs provides an online booklet called “Georgia Landlord Tenant Handbook” which presents a lot of helpful information on the topic. It’s somewhat dated, but it’s free and you can download it at money99.com.
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