Have you become an “accidental landlord”? If so, you are not alone. Here’s my story:

My husband and I got married in July of 2008. Like any good Realtor, I decided to stage his house and make the necessary renovations to get the house sold. It took 3 months instead of 2 weeks…but FINALLY!  I changed the countertops, glazed the bathroom tile, landscaped and repainted.

The day that I put the sign in the yard, the stock market fell 679 points. (Do you remember October 9, 2008?) Needless to say, we decided to rent his house instead of sell it.

As an “accidental landlord” myself, I wanted to give my Top 5 Tips to accidental landlord success:

• Minimize vacancy by offering a competitive lease rate. Overpricing your rental can cause the home to sit vacant for a month or longer. Vacancy is extremely costly. For example, if your home rents for $1200 a month and you miss one month’s rent, you could have gotten a renter at $1100 a month and broken even. Therefore, it is better to err on the conservative side and get a renter in your property, rather than trying to “see if you can get” a higher rent. Further, offer incentives for longer leases. Longer leases will lower your clean-up costs and minimize your vacancy risk.
• Be sure to hold the Renter’s security deposit in a “Trust Account.” Do not co-mingle the security deposit funds with your regular checking or savings account. I went to a bank other than my primary bank (so that I don’t have access to the funds) and opened a new account. You must have the word “Trust” in the name of the account. If you don’t already have it as a trust- named property, just visit your local branch and ask them to add “Trust” to the name.
• Have a great resource for handymen and other trades with you at all times. No joke—- last year, the furnace broke the day after Thanksgiving and the hot water heater needed to be replaced the day after Christmas. Both times we were out of town visiting family. Thankfully, I’m a real estate agent, and we have a tremendous amount of resources. If you need a list of qualified contractors, visit our Allen Tate Home Services website. We provide a list of all of our top Realtor-utilized contractors for you.
• Change your insurance to a landlord’s policy. This step is critical. If anything happens, you want to make sure that your insurance is valid. (I just bundled all of our homes/cars/umbrella policies and saved $700 a year with Allen Tate Insurance. If you need a quote, you can call/email Allen Tate Insurance: click here.)
• For help with the paperwork, a rental price and/or finding renters, engage a Realtor. If you don’t know what rent to ask, call your Realtor. Our Listing Service has rentals and your Realtor can help you understand which properties are being leased for what price. If you don’t have time or are worried about meeting people at your home, Realtors can also list your property “For Rent” on MLS, Craigslist and others aggregators. The Realtor can help you find resources to qualify the renter and provide you with a standard lease. (An attorney can also help you with a lease and there are some leases available online but please review any lease to insure that all contingencies are covered.)

Bonus: I like to stay current on which houses have sold near our rental property. Hopefully, I can refinance or sell our “accidental rental” one day. I send my husband and myself a Market Report each month on the neighborhood to keep up with activity. If you want one for your rental neighborhood, please click here.

Does anyone else have tips for the growing number of “accidental landlords”?

By Amanda Jones