If you decided to make the decision to rent out your house, there’s a lot you need to consider. While a lot of people go with using an agent, we wanted to talk with you about everything you need to know about renting your house without an agent.
While using an agent might make the entire process easier, it’s a lot more expensive and can be harder for you to actually rent out your home. Below we’re going to talk about reasons why you shouldn’t necessarily go with the real estate agent to rent out your home and how you can do it without one the easy way.
Table Of Contents For Renting Without An Agent
- Why You May Not Want To Use An Agent?
- How To Rent Without An Agent?
- Tips And Tricks For Renting Your Own Home
Why You May Not Want To Use An Agent?
So, why should you not use an agent when renting out your home? Are there certain things you need to be aware of? Will this cost you way too much money and mess up your budget? Let’s talk about a handful of reasons why you may not want to use a real estate agent for this very purpose.
If you’re putting your home on the market for potential renters to see, real estate agents will only use the multiple listing service. This is a service that is only accessible by real estate agents and is, often times, the only service that they use to find housing that’s available.
When a landlord uses the multiple listing service to look for rental properties that are on the market, they’ll miss everything that’s available from a landlord that’s not using a real estate agent. This makes it so that there are very few options available, and your home may not be one of them.
When you’re renting your home, you want to post a listing just about everywhere possible so you can find the best tenant there is available. Using an agent that also uses the multiple listing service will prevent this from happening.
On that same note, if you were the one looking for a home to rent, you are more likely to see better properties available just by looking at real estate sites online on your own.
They Cost A Lot
Just like landlords, real estate agents expect to get paid. They’re usually found working with people who are buying or selling their homes. When you hire a real estate agent, you have to pay them by giving them a percentage of what your home sells for.
This can add up to tens of thousands of dollars, depending on what your home sells for. Since the housing market is so accessible by prospective tenants and landlords alike, it’s almost pointless to hire a real estate agent that will only end up costing you money.
Similarly to selling your home through a real estate agent, if you want to rent out your home with one, you’ll end up paying a percentage of the rent you receive to the agent in the form of a fee for finding a tenant and possibly fees for “managing” the tenant.
A lot of the time tenants will look for future housing on their own, which takes out the purpose of a landlord or homeowner even needing to use an agent in the first place.
They May Not Want To Work With You
When it comes to real estate agents, it can actually be hard to find one that will help you rent out your home. Most of the time, real estate agents are looking for a property that is for sale, not for rent.
They also may not want to work with you because they may require a real estate agent commission. Most landlords don’t want to pay this commission, as it’s not really necessary. You can easily find someone to rent your home without needing to pay extra money.
Doing More Bad Than Good
If you’re a landlord, chances are you’re already well aware of how much houses and rental units go for in your area. When you put a real estate agent into the mix, they’ll tend to want to negotiate rent prices and will oftentimes have the tenant pay a lower rent than you’re wanting to receive.
As a landlord, you’re likely not looking to negotiate on rent prices. Doing that on top of paying a commission for a real estate agent just sounds like a big waste of money to us.
How To Rent Without An Agent?
So, with all that being said, how exactly do you rent your home without using a real estate agent? While it is a lot cheaper to do so, there are some things that you need to be aware of. There are certain concerns that can come up when you’re renting out your property.
Looking For Tenants
Whether you’re using a real estate agent or not, the first thing you want to do is look for prospective tenants. It’s important to note that not all tenants are good tenants.
You can easily post your home for rent across sites like Trulia and Craigslist. You can have people fill out an application right from the advertisement. You’ll also be able to complete background and credit checks if needed.
There is even software you can download that will post your rental property for sale across multiple sites with the click of a button. This saves you time, energy, and possibly money.
If you were to hire a real estate agent, they would do this for you. But it’s not a lot of work and it’s fairly easy. Why not do it yourself and save some money in the process?
Create An Inventory
Now, let’s say you found a great tenant to rent your home. This can be an entire family, multiple college students, or a single person looking to rent their first home.
Your next step is to prepare an inventory (or a move-in, move-out checklist). This isn’t necessarily mandatory, but you should create one as it can help you in the long run. When renting your home, an inventory will form the basis of any claim you have for the deductions from the deposits which you’ll need to go through and also take photos of before anyone moves in.
You can do this yourself or you can allow your letting agent to do it for you. Be sure that all deposits are kept with a deposit protection scheme by making sure that you give the tenant the paperwork that is needed legally.
You also have the option to register the deposit yourself. If this sounds like a route you’d like to take, consider talking to an online letting agent.
Becoming A Landlord
Being a landlord comes with a lot of perks, especially when you’re renting out your own home. When you’re a landlord, you won’t have to pay a monthly fee for a letting agent to manage your property.
This can save you a lot of money over time and you’ll probably learn a few things along the way. That being said, there are some things that are required of you as a landlord.
You’ll always need to make sure that rent is collected, repair or hire someone to repair anything that needs fixing, make sure that the property is safe and livable, and you’ll also have to check the property every 3 to 6 months for current conditions.
Renting out your own home is a great way to bring in some extra cash while still getting the mortgage paid off. As long as you make sure that you find tenants that will pay rent on time and take care of the property, it should be a success.
What It Will Cost You
So, you know that by not hiring an agent you’ll save a lot of money, but this doesn’t mean you won’t spend anything. Being a landlord comes with a lot of requirements that you wouldn’t have if you were to use an agent.
One thing to note is that being a landlord can be quite time-consuming. You might have maintenance requests that pop up at the last minute, you may need to work late on weekends, or you might even find yourself working on a holiday.
A lot of the times being a landlord can take you away from important family time and there can be blurred lines between personal life and work. It may be good for you to know, but you can hire a maintenance staff to take some of the burden off of you.
Tips And Tricks For Renting Your Own Home
Whether you can’t find a buyer, or you’re just deciding to rent out your home, we wanted to include some tips and tricks for making the entire process as easy and as stress-free as possible.
Pricing Rent Adequately
Depending on your personality, you might feel like you shouldn’t charge that much for rent. It’s important when you’re a landlord to know that you have to make some money. This is why it’s crucial to price your rent according to the area the property is in.
Let’s say you live in Saint Paul, Minnesota. You’ll find that a neighborhood like Highland Park is going to have much higher rent prices than that of a neighborhood like Midway.
If you have a house for rent in Los Angeles, you’ll need to charge more for rent if it’s located downtown, rather than in the outskirts such as Irvine. But how do you know how much rent is for the area you have a property in?
There are a number of ways you can check this; you can look online and see what similar properties are going for, or you can ask around. You may also call real estate agents and see what they would charge a renter for a home like yours.
As long as the mortgage is covered and there is a little on top for you to make an income, you should be good.
Properly Screening Tenants
You already read a little bit above about what it takes to find the right tenant. We want to encourage you to take a few important steps when it comes to finding the perfect tenant.
It is absolutely crucial to perform a background check. This will show you a lot of information about the prospective tenant and can help you decide whether they are a good fit or not.
You’ll also want to pull a credit report. You can easily do this on your own by researching information through credit reporting agencies such as Equifax or Experian. It is important to note that you’ll want to follow the Fair Credit Reporting Act or FCRA when doing so.
On top of that, you’ll want to check their criminal history. Some information may come up related to their criminal history on their background check, but it’s important to do both. You can search state as well as local records online or you can find an agency that will do it for you to get you the information you need.
Lastly, it’s important to check references. This can be something as simple as contacting their employer to see how long they’ve been working there. You can also check references by calling the prospective tenant’s previous landlords and hearing what they have to say.
Writing A Lease
Another thing that is absolutely crucial to do when you are renting out your own home is to have a written lease. Normally, if you were to have an agent, they would help you with this part, but without one it’s up to you to do it.
When you have a lease, it needs to include some specific information so that you and the tenant are on the same page. We’ve included some of the basic things that should be in the lease below:
- How long the lease is or the lease term. This can be month-to-month, 6 months, 9 months or 12 months. As a landlord, the lease term is up to you.
- A security deposit as well as first and last month’s rent
- Rental due dates
- Any additional fee information
- Additional charges such as a parking space
- Who’s responsible for what repairs
- A list of all tenants
- What upkeep the landlord is responsible for, such as lawn care
- Any rules that the tenant needs to follow
- Eviction terms that are clear to understand
- Any pet-related information or rules
- The dates the lease is active
- Anything related to HOA fees
It may seem like a lot of information, but you’d rather have things covered and communicated than not. A lease is a legally binding contract that you and the tenant are required to follow and that is there for the protection of both
Have House Insurance
Another crucial step to renting out your home without an agent is to protect your home with the correct insurance policy. This will be a different policy than the one you had when you were living there.
When you lived in your own home, your insurance was a homeowner’s policy. This will cover things like the structure of the home itself, any damages that may occur to the home or within the home and any belongings that you have inside the house.
When you rent out your home, you’ll need rental home insurance instead, also known as fire insurance. This is absolutely necessary and can save you a lot of money and potential lawsuits in the long run.
Rental home insurance will cover the structure of the house, legal costs, loss of rental income if your tenant doesn’t pay, repairs and fixes along with any medical expenses that may be required.
In addition to you having rental home insurance, you may want to charge a fee for your tenants to have renters insurance or advise them to get renters insurance on their own. This will help to cover their belongings in case something bad were to happen to or within the home.
You read a bit about how hiring your own maintenance team can be incredibly helpful. These are employees of yours that will fix repairs if needed and handle all the on-property needs.
You may also want to hire a management company. They will help you not only to find a tenant, but they’ll perform all the tenant screening procedures that are required. This will also keep you emotionally distant from the tenant, which may come in handy if you need to evict them.
Hiring a management team will ensure that you get the rent every month and that your tenants treat your home with care. Whether you’re hiring a maintenance employee or a property manager, it’s important to know that these cost money and will decrease your monthly income.
Be Aware Of Eviction Laws
Lastly, you need to be aware of the eviction laws for your state. If you need to evict a tenant, you’ll likely need an attorney. Sometimes the tenant won’t leave willingly, and you can’t just go into the property and remove them yourself.
The laws vary quite a bit from state to state, so it’s important to be aware of the laws and regulations for where your property is. You should also be aware of the reasons why you can evict someone along with what’s not considered an offense that can lead to eviction.
Eviction can make things quite awkward; if you have the chance, sit down with your tenant and have an adult conversation. Tell them you understand what they’re going through and give them the opportunity to pay rent within a certain number of days or you’ll file an eviction lawsuit.
Let them know that an eviction lawsuit can ruin their credit score and any possible chance for them to get a loan or mortgage in the future. Be kind when doing this, but also be stern and straightforward.
Hopefully, this has taught you everything you need to know about how to rent your house without an agent. It may require a bit more work on your behalf, but it will also save you a ton of money in the long run.
Renting out your home is a great way to make extra income each month. There are plenty of things you can do to take some of the responsibility off your shoulders, such as hiring a maintenance employee.
Make sure you’re aware of all eviction laws and that you have everything covered in the lease. Also, be sure that the tenant has read the lease and has the option to ask questions if they have any about the lease.
Whether you hire a real estate agent to help you rent out your property is up to you as both situations (renting with the help of an agent and without one) have pros and cons you need to weigh up.