How to rent out a house correctly and safely
If you own a house that no one lives in, there is no point in keeping it empty. The property can bring a good income if you bring it in proper shape and find tenants to rent it out for a long term. We will share our tips and consider all the important nuances of how to rent out a house: preparing the house, setting the price, finding tenants, reducing risks, drawing up a rental agreement, etc.
Preparing a house for rent: what an owner needs to do
Preparing your home for rent is an important process that will help you find tenants faster and set a favorable price. Here is a simple step-by-step guide to what a future landlord needs to do at this stage:
Make minor repairs. To keep the house looking attractive, it's worth updating the wall paint or putting up new wallpaper if necessary. You should also check the plumbing and the serviceability of sockets, screw doors on furniture, if necessary. There should be no burned-out bulbs in the light fixtures.
Do a general cleaning. After renovation, it is important to carry out a quality cleaning. You can do it yourself or entrust the whole process to a cleaning company. In the house you need to clean the windows, doors, plumbing and floor. Remove old and unnecessary things from cupboards and nightstands. After cleaning, it is worth airing out the room to eliminate any unpleasant odors.
Make the space comfortable to live in. The house should have all the necessary furniture (bed with mattress, table, chairs, closet, etc.). It is great if it is possible to provide future tenants with basic household appliances: refrigerator, stove, washing machine.
Check the communications. Before handing over, it is important to make sure that the water supply, heating and electricity are working properly. For convenient calculation of utility payments, it is best to install meters for everything, if they do not already exist.
Create a cozy and comfortable environment. To make you want to stay in the house, it is important to create an appropriate atmosphere. To do this, you should hang curtains, add rugs, and put some flowers in the house. The house should have access to the internet.
Once the house is ready to be rented out, it is necessary to take several high-quality and bright photos of all the rooms. If the owner plans to look for tenants on his own, the photos will be useful to him when placing ads.
Calculating the optimal cost of renting a house
One of the important nuances when renting out a house is the correct calculation of the rent amount. The price should be favorable for the landlord, but at the same time suitable for the tenant. If the rent is underpriced, the owner will not get the full profit from the house. If overpriced, the home may not be of interest to potential tenants. That is why it is so important to determine the optimal cost.
To calculate the right price for renting a house, you should research the real estate market and look for similar properties. You should look for houses in the same neighborhood and with the same size/number of rooms. Having roughly determined the average rental price for similar houses, you should form a more accurate price. In this case, it will help to evaluate such criteria as the condition of the house, the layout, the availability of furniture and appliances, the area of the yard, the garage, and so on. The more advantages the house has, the higher the final rental price will be.
When forming the price, it is also important to take into account the additional costs that will be paid by the owner of the house. These may include utilities, taxes and compulsory contributions. If tenants will pay for utilities, then you can slightly reduce the cost of rent.
Finding reliable tenants: where to look for clients
One of the biggest fears of novice landlords is to rent out their homes to fraudsters or unscrupulous tenants who will break appliances or furniture, ruin repairs, make noise and disturb neighbors, etc. There are also fears that the tenant will rent the house to other people or live there with a large group of friends. There are also fears that the tenant will rent the house to other people or live in it with a large group of friends.
Here are some of the most common ways to find renters:
Notifying relatives, friends, acquaintances, and coworkers;
placement of announcements on thematic Internet resources;
publication of advertisements in printed publications;
advertising in social networks;
independent search of online advertisements in the "rent a place to live" section.
Whichever method is chosen, it is important to use trusted websites and other resources to find a reliable tenant, and to evaluate candidates carefully. When talking to a potential tenant, it is worth asking him or her about their place of work and stable income. During the meeting, you should always ask the candidate to show his passport and identification code: these data can be used to find basic information about the person. A copy of the documents will come in handy if a decision is made to sign a contract.
It is important not only to verbally discuss the rules of living with the future tenant (payment, rental conditions, responsibilities, etc.), but also to spell out all the essential points in the contract. Even if you find a tenant through acquaintances, this does not guarantee his reliability, so it is always worth minimizing your risks by signing a rental agreement, as well as agreeing on an acceptable deposit amount. This will help to protect the owner when renting out the house.
Lease agreement: how to draw up this document correctly
If you want to officially and safely rent a private house, you should sign a lease agreement with the tenant, and it is important to properly draw up the document itself. To do this, it is best to contact a real estate lawyer. But some owners prefer to do everything themselves.
In the rental agreement for the house, it is necessary to specify the identification data of the parties:
full name;
identification number of the tax payer;
series and number of the Ukrainian citizen's passport or other document, e.g. residence permit or refugee certificate;
registration address and/or residence address;
bank account number.
The document must also stipulate the subject of the contract. Under a house rental agreement, one party (the owner of the real estate object) transfers or undertakes to transfer to the other party (the tenant) a house for living in it for a certain period of time for a specific amount of payment.
The contract must specify the exact address of the house, its area, and the registration number of the real estate object. This data makes it possible to clearly identify the dwelling to be rented out. In addition, it is necessary to specify in the agreement the procedure for payment of rent, lease term, obligations of the parties, details of the lessor and the lessee. The lease agreement may contain other terms and conditions, which should not contradict the current legislation of Ukraine.
When concluding a lease agreement, it would not hurt to draw up an act of acceptance of the house. In this act, the parties record the fact that the tenant has moved in and started living there. Also in the act, the owner describes all the property that is transferred to the tenant for use and indicates the meter readings.
The lease agreement and the house acceptance certificate are signed in two identical copies: one for each party.
Taxes when renting out a house: do I have to pay them?
According to current legislation, income received from renting out a house or other real estate is subject to taxation. Since the income is received by the landlord, it is the landlord who is obliged to pay taxes and other contributions. The tenant does not pay any taxes when renting a home.
The amount of taxes when renting out a house depends on the format in which the property is rented out. If the owner rents out a private house as an individual, he is obliged to pay a tax of 18%. In addition, it is also necessary to pay a military levy of 5% of the rental value. When registering as an FLP (sole proprietorship), the amount of tax depends on the chosen taxation system.
Regardless of the amount, any income from renting out a house must be declared and taxed. Renting out real estate without paying taxes is considered an offense. According to Article 212 of the Criminal Code of Ukraine, it is punishable by a fine from 51 to 85 thousand hryvnias.
Why you should contact a real estate agency when renting out a house
You can rent out your home on your own or with the help of a real estate agent. Renting out your home through a realtor has some advantages, especially if you want to avoid hassle and find reliable tenants.
Here are a few reasons why you should contact a real estate agency when renting out your home on a long-term basis:
fast - finding tenants through an agency in the shortest possible time is much more realistic, as realtors have their own client bases;
reliable - realtors necessarily check the solvency and reputation of the tenant, which avoids cooperation with unreliable clients;
safe - the real estate agency has its own lawyers who help to draw up the right lease agreement;
profitable - specialists know the market, so they will help to set the most favorable price for the landlord.
In addition, the realtor saves the time of the property owner, as most of the processes are taken care of: search for tenants, advertising of the object, preliminary coordination of details with candidates and so on.
Rent out your house in Kyiv or Kyiv region for a long-term lease with the help of realtors of the Mayak Real Estate Agency to get a good additional income and avoid risks and problems.
