Are you a homeowner who has decided to turn their home into a rental property?
There are several reasons that this is an excellent idea. You’ll earn consistent and recurring rent. You’ll allow your property to grow in value, even while your tenants pay down the rent and contribute to costs like insurance, taxes, and maintenance.
When you have a property to rent out in Charleston, you’re in a good position financially. There’s always a demand among great tenants for well-maintained homes in attractive neighborhoods.
Real estate is a fantastic investment, even when we’re not sure what to make of the market.
Renting out your home can make you some money, but you need to know that it also comes with risks and headaches. You will become a landlord, and that’s not something that everyone has the personality or the patience to do.
As you’re transitioning from homeowner to landlord in Charleston, here are some of the first steps you need to take.
Change Your Insurance to a Landlord Policy
First, you’ll need to update your insurance.
The main difference between your landlord insurance policy and the homeowner’s insurance policy you have on the home while you are living in it is that your landlord policy covers the structure of the home and the costs to repair and replace it. Your landlord policy will also provide extra liability coverage and other important protections, such as loss of rent coverage.
However, it doesn’t cover any personal belongings that aren’t yours.
Once you convert from a homeowner’s policy to a landlord policy, your own possessions are covered, such as appliances. But, your tenant’s personal items are not the responsibility of you or your insurance policy. That means you’ll want to require your tenants to have renter’s insurance. It protects both of you.
Talk to your insurance agent about switching to a landlord insurance policy. It shouldn’t cost too much more than what you’re currently paying.
Prepare to Treat this Home Like a Business
There’s an emotional side to real estate, and that’s especially true when you’re renting out property that you once lived in yourself. There are a lot of memories built into the home you’re leaving, and often it’s difficult to separate your feelings from your business enterprise.
What you have to remember is that while you own the property, it’s becoming someone else’s home. This is your investment now. It’s no longer where you eat breakfast and go to sleep and raise your kids.
It can be difficult to manage your emotions as a landlord, especially when you still have strong feelings attached to the home you’re renting out. But, you have to approach this property as a business. Before you rent out your home, make sure you can treat it like a business. Make sure you can detach emotionally. You cannot become upset when your tenants don’t treat the home the way you would treat it yourself. You cannot stop over to sit in your favorite spot or enjoy coffee on the front porch, like you once did.
This is a property now, not your home. It’s a business, and you need to make business decisions around it.
Preparing to Maintain Your Charleston Rental Home
As a landlord who is renting out a property, you’re responsible for providing a property that’s safe and habitable for tenants. It also has to be well-maintained. Not only does this serve your tenants, it also protects the value and condition of your investment.
You’ll need a reliable list of preferred vendors who can respond quickly when you need help. These should be licensed, insured professionals who are committed to giving you the best prices on the high quality work they provide.
As property managers, we are at an advantage because of the volume of work we provide to our vendors and contractors. Individual landlords have a hard time negotiating those discount prices that we’re frequently given.
Adopting a good preventative maintenance plan can help you keep costs down. It’s also likely to eliminate surprise repairs. Having your HVAC system inspected and serviced once a year, for example, will extend the lifespan of your heating and air conditioning units, and reduce the risk of having to replace an expensive cooling system.
As you prepare to transition into the role of landlord, make sure you’re ready to respond to any repairs or replacements that are needed at your property. When you occupied the home, perhaps you noticed the wonky door on a closet but didn’t care too much about it to fix it. Tenants will care. You have to provide a well-maintained property, and you have to respond to the maintenance requests that will inevitably come in.
Understanding Legal Requirements and Risks
Landlords need to be more vigilant than ever when it comes to following the laws and requirements that cover rental homes in South Carolina. While we’re not nearly as protective of tenants’ rights as states like California and New York, there are some specific laws, requirements, and rules that you need to understand if you’re going to be a Charleston landlord. Prepare to dig into topics like:
- Habitability standards.
- Lease language requirements.
- Fair housing laws.
- Security deposit laws.
- Eviction laws.
- Differences between pets and service animals and companion animals.
Even experienced landlords are at risk of making expensive legal mistakes, and new landlords often aren’t even sure of how to keep up with state, local, and federal laws.
Educate yourself on how to legally market your property, screen your tenants, and rent your home. Get a good lease agreement that protects you and your property. Give your tenants proper notice before you enter the home or raise their rent. Only work with insured and licensed vendors.
These are priorities now that you’re a landlord.
Working with Professional Charleston Property Managers
Being a landlord requires a lot more of you than finding a tenant and collecting rent.
It can quickly become a full-time job, especially if you’re trying to juggle your actual job, family responsibilities, and other priorities. If you want to enjoy the benefits of renting out a property without all the time requirements and stress, consider working with a Charleston property management company. You can benefit from our experience and resources. There’s no need to worry about emotional attachments, tenant conflicts, or property damage.
As experienced property managers, we’ve seen and done it all. We’ve made the mistakes already.
Please contact us at Meridian Residential Group. Located in North Charleston, our team provides both single-family and multi-family property management in the Charleston, SC area, including in North Charleston, Summerville, Goose Creek, and Moncks Corner, among other cities.