To rent a property, whether to live or as an office space, can be a great way to have an extra income, but if you are not sure what type of documentation you need or how you should prepare a contract, you can jeopardize your assets.
It is perfectly understandable that you have doubts about placing in the hands of strangers the property that has taken so much effort to acquire and remodel. But, with a little basic information, you can gain enough confidence to take the plunge and earn a new source of income.
real estate management companies, compiled these tips to know how to take advantage of a property (an investment) safely.
- Research a little about your client and their guarantor
This is the most important and perhaps the most complicated point, since many times an investigation may not show that the client is a bad tenant or has had previous problems in a property with other house owner.
You can get an overview of a person by checking their Credit Bureau or Credit History. Also, make sure you have the financial solvency necessary to rent the property and at this point the guarantor also plays an important role.
If you don’t have the time to investigate some financial facts about the prospect, Bay Management Group have a team that can do the task for you in a very short time.
- Prepare a good contract and stay in touch
The contract works to establish from the beginning the clauses that it considers indispensable for the correct use of the property that is being rented.
Some basic points that a contract must have are the name of the lessee and its guarantor, the description of the property and the guarantee for the fulfillment of the obligations, however, the ideal is that once the contract has been completed, you will be always aware of how and why your property has been used, especially if there is any suspicion that the property can be used for any illegal activity.
Do not allow the client to start living in the house or to use it for commercial purposes before signing the contract, because the client will not be responsible for repairing any damage caused to the property before signing the contract
A good relationship with the client it’s always the best way to keep in good safe the property you are renting (Image courtesy of Military.com).
- Hire a policy
Currently there are legal policies that allow to cover expenses such as the eviction of a property in the event that the tenant does not pay, and also the recovery of income or payments for damages that may arise in the department.
These policies are contracted through a specialized office and the amount varies depending on the type of coverage you wish to contract.
The policies can be paid by the lessor and the lessee, half each one. These policies are also responsible for doing both the credit and legal investigation of the property, as well as the lessee and the guarantor to verify that both are solvent persons.
Keep in touch of our blog to read more content about renting a property in the best way possible. Bay Management Group is constantly posting in his official blog new articles that will help you archive your goal creating a new source of income with one of your properties.