I’m a Real Estate Agent: 5 Steps To Take Before Renting Out Property To Make Money During Retirement
Written by
Laura Bogart
Edited by
Molly Sullivan
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Maybe you’re sitting on an old family property that you no longer need as a vacation home as you head into retirement. Or perhaps your own home has gotten a little too big, and you’re looking to downsize personally but without selling your property. Either way, you’re looking to bring in some passive income during your retirement years, and you’re thinking you should rent out that property.
But you’re not a landlord. You wouldn’t even know where to begin the process. What sorts of upgrades should you make (if any)? How should you draft a rental agreement? Who would actually manage the property for you?
If all these questions leave you dizzy, don’t worry. GOBankingRates talked to Lance Doty, acquisition manager at Home Buying Guys, for clear tips about what to do before you rent out your property and add a little bit of green to your golden years.
Research the Market
Knowing the answers to some of your biggest questions, such as how much you should charge and what kinds of amenities you should offer, is the first step in renting out a property. Doty suggested that retirees who want to rent out their homes need to start by researching the rental market in their area.
“This will give them an idea of how much they can charge for their property and what kind of amenities are most desirable for renters,” he said. “It’s also important to familiarize themselves with any laws or regulations regarding renting out properties, as this can differ from state to state.”
Make All Necessary Upgrades
Once you know what renters are looking for in your market, your next step is taking an honest inventory of the necessary upgrades or repairs you’ll need to make before putting that “for rent” sign up.
These upgrades could involve anything from fixing plumbing and electrical issues to updating your appliances or simply applying a fresh coat of paint. Doty shared that these changes can make the property more attractive to your first renters — while also justifying a higher rental price.
Market Effectively
You could have the most beautiful, modernized home ready for the perfect tenant to take the keys, but that tenant has to know it’s available. Marketing is an absolutely essential component to renting out your home, and Doty said one of the best places to start is understanding the kinds of renters you’re hoping for. Once you know who you hope to attract, you can tailor your message appropriately.
“If they live in a retirement community, their target renters may be other retirees looking for a quiet and peaceful vacation spot,” he added. “In this case, marketing their property as a serene retreat with amenities like walking trails or a golf course nearby could attract the right kind of renters.”
Hire a Property Manager
You might think that, as a retiree, you have the time and bandwidth to take on responsibility as a landlord or property manager. Doty encouraged you to think again.
He said that retirees looking to avoid the stress and time commitment of being a landlord should consider hiring a property management company to handle the daily responsibilities of renting out their homes, such as finding and screening tenants, collecting rent, as well as handling maintenance issues.
Be Prepared for Challenges
If there’s one thing that retirees who are entering into rental spaces should expect, it’s the unexpected. You could be dealing with anything from difficult or unreliable tenants, unexpected repairs or even long vacancy periods between renters.
“Finally, retirees should always be prepared for potential challenges that may come with renting out their property,” he said. “Having a contingency plan in place and setting aside extra funds for these situations can help retirees navigate these challenges without impacting their financial stability.”
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