If you’ve decided to rent out your Santa Cruz home, you’ll need to stop thinking about it as your own home and start thinking about it as a business. That’s not always as easy as it sounds.
Make the process easier by preparing for the challenges and complexities that come with renting out a home. There are steps you need to take before you list your property as a rental and start looking for tenants.
We’re here to help, and in this blog we’re sharing 7 things that you’ll want to check before you rent out your Santa Cruz home.
1. Check Your Landlord Insurance
Keeping yourself and your property covered with adequate insurance is essential to protecting your investment. If you lived in the home before you decided to rent it out, you might still have a homeowner’s insurance policy in place. You need to change that to a landlord policy. If you neglect to make this change, your potential claims may not be covered. Talk to your insurance agent so you have the right coverage in place.
You may notice that the landlord policy costs a bit more, but you’re getting more liability coverage. The major difference in these two policies is that with a homeowner’s policy, your personal possessions inside the home are covered. A landlord policy only covers the structure of the home as well as the extra liability insurance.
This is a good reason to require renter’s insurance from your tenants. You want them to protect their own belongings, and your policy won’t provide that coverage. Require proof of renter’s insurance before your tenants move in.
2. Put Together a Lease Agreement
You need a strong lease agreement in order to effectively rent your Santa Cruz property to tenants. If you’ve never rented out a home before, you may not know where to look when it’s time to find and sign a lease.
The internet is where we always go when we need a sample of something or specific instructions. But, you don’t want to download any template you find. It needs to be specific to California, and it needs to include some language that covers disclosures, rent control, and security deposits. Make sure you have the lease you want to use reviewed by a Santa Cruz property manager or an attorney. You can get a reliable sample lease from us or from a trusted agency like the California Apartment Association or the California Association of Realtors.
3. Look for Safety, Habitability, and Cleanliness Issues
Your home needs to be ready for the rental market, which means it has to be safe and habitable. It also has to be clean.
Walk through your property and look for any safety issues. Test the smoke detectors and carbon monoxide detectors. Make sure the windows and doors can easily open, close, and lock. You want to be sure there aren’t any hazards like loose steps or broken handrails.
Then, hire professional cleaners. You’ll have a hard time finding good tenants if the property isn’t clean.
Have the home professionally cleaned. A professional will do a deep clean, attending to details you might not even have thought about. They’ll dust baseboards and sweep behind appliances.
4. Be Willing to Make Improvements and Upgrades
Before renting out your home, make sure you’re set up to earn as much as you possibly can. You also want to be confident that you’ll quickly attract well-qualified tenants. Are there any minor upgrades or renovations that might help you increase what you earn? Do you need a coat of fresh paint throughout the house? Are the carpets looking like they’ve seen too much traffic?
Replace any old and inefficient appliances. Upgrade your lighting and your fixtures. Simple and cost-effective cosmetic improvements can go a long way. Drawer pulls, for example, and cabinet knobs are an easy way to update your kitchen without a huge renovation budget. Tenants will pay more and be more eager to rent out your home.
5. Evaluate Your Outdoor Space
Curb appeal is really important when you’re renting out a home. This is your prospective tenant’s first impression of the home. Make sure it counts.
Whether you’re renting out a single-family home with a lawn or a multi-family property that has a courtyard, you need to make sure your outdoor space is welcoming, clean, and attractive. The lawn needs to be mowed, the bushes and trees need to be trimmed, and the exterior of your property must be clean, fresh, and looking good. Is the parking area clear of debris and trash cans? Is it an easy path to the front door? Your first impression will really make an impact when you’re renting out a home.
6. Set the Right Santa Cruz Rental Price
Price your property correctly. Take a look at what similar homes are renting for in your neighborhood, and stay in range. A property that’s underpriced will lose you money right out of the gate. A home that’s overpriced will only lead to long vacancies. If you’re struggling to access reliable data on local rental rates, contact a Santa Cruz property manager. We gather this data all the time.
7. Review Rental Laws
The legal landscape is complex, especially in California. When you’re renting out a Santa Cruz property, you have to be compliant with all state, federal, and local laws. If you don’t know the rent control laws, the just cause eviction requirements, and the regulations that cover security deposits, Section 8 screenings, and service or support animals, you could find yourself making an expensive legal mistake.
Recovering from a legal misstep will be expensive. If you want to rent out your home, you’ll need to educate yourself on the current laws and commit to staying updated on all the changes.
Renting out your home in Santa Cruz is a great idea. If you’d like some support and resources from a qualified property manager, please contact us at Portola Property Management. We’ll help you have a successful rental experience.