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I’m finally ready to take the plunge into making some passive income on my real estate, starting with my own home. My goal is to get at least 1, preferably 2 of my bedrooms rented out by the end of the year. Maybe I could even rent out my basement down the road. I’m looking to rent each room out for $500/month, which from my research, looks to be below market value. Besides, if I charged much less than that, I would start to only break even, due to increase in utilities costs, taxes, and repairs.
That said, I’m surprised I didn’t see a topic on here about the pitfalls of renting real estate, so I thought I would do so here. I’m not worried about the loss of privacy, as I live mostly by myself here. Also, I’m not worried about the tenants trashing the carpet, since I’m a professional carpet cleaner. That said, I do have some questions that have already come to mind.
1) Should I hire an attorney to draft a contract for me?
I asked my attorney (who is real good) what it would cost to have him do that for me, and he said probably about $250-375, depending on how long it takes. Obviously, I would need to state things like what are the common areas, is smoking allowed (no), and can they use my laundry machines. This all seems pretty basic to me and I found a free contract online that seems to cover all the bases.
That said, my default option would be to pay the attorney. In theory, I would make that money back in the first month, plus I would have the template for future rentals. I’d say it would probably be money well spent, given my experience with him in the past.
2) Any thoughts on advertising a room for sale?
I don’t have much money to put into advertising. The newspaper is expensive. Some people suggested Craig’s List to me, so I’ll definitely try that. I could make out some fliers, though I have no idea where I would put them.
3) Should I constantly advertise for new tenants?
My greatest concern with renting is how do I prevent extended vacancies. My guess would be that I would have to constantly be advertising for new tenants, so that I will always have another one waiting in line. If my rooms are full, then I would say so, but keep them in mind.
I just want to make sure that I’ve got all my bases covered for this significant change in my life.
Thanks a lot.
That said, I’m surprised I didn’t see a topic on here about the pitfalls of renting real estate, so I thought I would do so here. I’m not worried about the loss of privacy, as I live mostly by myself here. Also, I’m not worried about the tenants trashing the carpet, since I’m a professional carpet cleaner. That said, I do have some questions that have already come to mind.
1) Should I hire an attorney to draft a contract for me?
I asked my attorney (who is real good) what it would cost to have him do that for me, and he said probably about $250-375, depending on how long it takes. Obviously, I would need to state things like what are the common areas, is smoking allowed (no), and can they use my laundry machines. This all seems pretty basic to me and I found a free contract online that seems to cover all the bases.
That said, my default option would be to pay the attorney. In theory, I would make that money back in the first month, plus I would have the template for future rentals. I’d say it would probably be money well spent, given my experience with him in the past.
2) Any thoughts on advertising a room for sale?
I don’t have much money to put into advertising. The newspaper is expensive. Some people suggested Craig’s List to me, so I’ll definitely try that. I could make out some fliers, though I have no idea where I would put them.
3) Should I constantly advertise for new tenants?
My greatest concern with renting is how do I prevent extended vacancies. My guess would be that I would have to constantly be advertising for new tenants, so that I will always have another one waiting in line. If my rooms are full, then I would say so, but keep them in mind.
I just want to make sure that I’ve got all my bases covered for this significant change in my life.
Thanks a lot.
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