Renting Out Your Home in Durham: Everything You Should Consider

Key Takeaways

• Rental property owners should run the numbers carefully, factoring in mortgage, insurance, maintenance, and property taxes to ensure their rental property generates positive long-term cash flow.
• Understanding and following landlord tenant laws is essential for rental property owners, covering duties like habitability standards, fair housing compliance, and proper eviction procedures.
• A property manager can streamline day-to-day operations of a rental property by handling maintenance requests, rent collection, tenant communication, and legal compliance.
• Preparing a rental property properly and using a strong lease agreement helps rental property owners attract quality tenants and reduce legal and financial risks while staying compliant with local regulations.
• Do you have some extra space in your home that you’d like to make some extra bucks from? Or, are you relocating to another city and still want to hang on to the home? Renting out your home is a great option to consider.

Do you have some extra space in your home that you’d like to make some extra bucks from? Or, are you relocating to another city and still want to hang on to the home? Renting out your home is a great option to consider as a way to generate passive income in today’s competitive rental market.

But while that can mean building a new stream of rental income, you’ll definitely need to work for it. Understanding how to rent out your house properly is key, because being a landlord isn’t a road to quick riches. Rather, it requires a lot of time and dedication, especially when navigating local landlord-tenant laws and broader landlord-tenant laws, but the rewards can be plentiful when managed correctly.

Being a landlord means knowing and understanding all the different aspects that come with owning a rental property. This includes deciding whether to manage everything yourself or hire a property manager, setting clear expectations for when tenants pay rent, and ensuring every detail is handled professionally.

Thankfully, that’s what this article by Mark Thomas Properties PM is all about. Here’s how landlords can rent out your Durham house to ensure the venture is smooth and financially smart.

Do the Math

Of course, by renting out your property, you’re seeking a return on your investment and building long-term passive income. Understanding how to rent out your house properly starts with knowing your full cost structure.

To turn a profit, you’ll need the cash flow to exceed your expenses, which may include landlord insurance, maintenance costs, property taxes, mortgage payments, property management fees, and a security deposit system that aligns with local regulations.

When it comes to day-to-day operations, you’ll also need to consider the process of collecting rent and managing consistent rent payments, since late or missed payments can directly affect profitability. These ongoing financial factors play a major role in determining whether your rental property remains sustainable and profitable over time.

If you find that your potential returns will offset the expenses associated with owning and managing an investment property, then you know you’re on the right track. Renting out a home is an investment for the long haul, so make sure you consider such expenses and your expected rental income carefully before moving forward.

Understand Your Responsibilities

Landlords have many responsibilities that they must uphold under the lease and local landlord-tenant laws and North Carolina landlord-tenant laws. When renting out your house, it’s also important to understand how protections like landlord insurance, a proper landlord insurance policy, and tenant requirements such as renters insurance all play a role in reducing risk.

Some of the common responsibilities landlords in Durham have include:

• Abiding by the terms of the lease or rental agreement.
• Providing your tenant with a livable space that adheres to the basic habitability codes enshrined in the North Carolina Warranty of Habitability.
• Ensuring your tenant enjoys their rental property in peace and quiet, away from unreasonable annoyances.
• Drafting a legal rental agreement that protects your rights and those of your tenants.
• Treating your tenants with respect and fairness in accordance with the Fair Housing Act.
• Staying on top of property maintenance and responding to repair requests on time, often supported by regular property inspections.

Financial and operational duties are also part of the role, including setting up a clear security deposit structure, managing collecting rent, and ensuring consistent rent payments from tenants.

These are just a few of the duties of a landlord. There are also plenty of day-to-day responsibilities to tend to when renting out your house, from coordinating repairs to enforcing lease terms. Be sure that you understand them all thoroughly to avoid potential issues down the line.

Have a Property Management Plan

When renting out your house, it’s important to approach it as a real estate investment, not just a side project. In today’s competitive real estate market, having a clear plan is essential for long-term success. A strong rental listing can help attract quality tenants, but ongoing management is just as important once the property is occupied.

Who are your tenants going to call when they need your help the most? A pipe could be leaking or they could lose their key and get locked out of their unit at 2 a.m. Will you be able to fix such issues while also managing everything else involved in how to rent out your house effectively?

Have a plan in place for the day-to-day running of the property. Broadly speaking, you have two options in this regard: either manage it yourself or hire a property management company to do it on your behalf. Many owners choose this route because property managers charge fees that are often outweighed by the time savings, reduced stress, and improved tenant management they provide.

Get Your Home Ready to Rent

Quality tenants expect quality living conditions. In addition, if you rent out a home, it means getting into competition with other landlords in the area. Therefore, you’ll need to stand out from the rest in order to attract a good-quality tenant.

Begin by giving your rental a thorough clean. Ideally, hire a professional to do it on your behalf. Professional cleaners know to properly clean all kinds of spaces can do a more detailed job than you could on your own.

Next, make sure that the home is secure. Remember, you have a responsibility to provide your tenants with a safe and livable home. So, ensure that all locks on doors and windows are secure. As for the appliances, make sure that they are all in good working order. Other things you should do include:

• Repainting the walls
• Replacing air filters in the HVAC system
• Replacing dead batteries in the smoke and carbon monoxide detectors.

Write a Lease Agreement

What you include in a lease agreement will set the tone for renting experience. You want to have a solid lease agreement that protects not only your rights but also those of your tenants.

A good lease is one that helps answer questions such as:

• How long will the lease term run?
• How many occupants are allowed to live in the unit?
• Can tenants keep pets? If so, is there a limit to the number, weight and size of a pet they can keep?
• Can tenants smoke inside the rental unit?
• How much is the monthly rent, security deposits, and any other fees?
• What are the requirements and/ or penalties for a tenant looking to break their lease?
• What is the maximum amount of time can a tenant have a guest in their house?
• Can a tenant make alterations to their units? If so, what exactly can they do and what are the requirements for doing so?

Although a quick online search can generate free templates that you can use to write up your own lease agreement, you will also need a professional to go through the draft in order to ensure that it abides by all federal, state, and local laws.

Learn About the North Carolina Rental Laws

The majority of states have laws that cover wide-ranging issues when it comes to rental properties. North Carolina is no exception, and understanding these rules is essential for anyone aiming to build passive income through renting.

For starters, did you know that there is a limit to how much you can charge a tenant as a security deposit? And the exact amount depends on the lease you’re operating. For instance, for a month-to-month lease, you cannot charge a deposit exceeding the rent of 1.5X the monthly rent.

It’s also important to consider financial protections like landlord insurance and a proper landlord insurance policy, which can help safeguard your investment property against unexpected damage or liability issues.

At the same time, managing collecting rent consistently is key to maintaining stable cash flow, while also ensuring you take advantage of eligible tax deductions related to your rental property expenses.

Also, did you know that you cannot just evict your tenant through self-help measures? For instance, by shutting off their utilities, removing their belongings, or locking them out. North Carolina has a statewide tenant eviction process that landlords must abide by.

Other laws to familiarize yourself with include:

• Warranty of Habitability.
• Fair Credit Reporting Act.
• Fair Housing Laws.

Hire a Property Management

Property management companies have the skills, experience, and resources to manage a rental property. A good property manager will help oversee all your management responsibilities, from legal aspects to rent collection and everything in between.

They will ensure that your property and tenants are well taken care of, all while keeping you in the loop.

Bottom Line

Renting out your home in Durham can be hugely beneficial to your bottom line. However, its success depends on how well it’s managed. If you’re just starting out, consider hiring a professional to do it on your behalf.

The experts at Mark Thomas Properties PM will gladly help you with all your property management needs! Contact us today to learn more about our services.