Are you ready to move your family into a new home, but you’d like to take your existing home and turn it into a rental? Rental property is a great way to make passive income, but it does take careful planning in order to convert your home into a rental unit. Here are some things you need to consider if you are planning to turn your home into a rental property.

Can You Be a Landlord?
One of the important things to know is whether or not you have the ability to be a landlord. If you have not dealt with this before, it pays to hire a property management company. Tenant issues are extremely challenging to deal with. Form tenant turnover to late rent payments, dealing with tenants is not an easy thing. If you do not have the patience, training and experience to deal with these challenges, you may want to consider a different option.

Mortgage Options
In most situations, the mortgage on a primary residence will have a lower interest rate than a rental property. If you want to convert your property into a rental, you can keep this benefit as the mortgage loan usually asks that you maintain living in that property for at least two years. Converting to a new loan that allows for renters can increase your interest rate, so you will need to look at all of your options. Some people find refinancing their loan is a great way to obtain some of the equity to put towards upgrades and repairs and to let the bank know you are planning to rent out the home. One of the biggest issues DIY landlords face is not knowing the terms of their mortgage loan, only to find out they are in breach of contract because they are allowing renters when they are supposed to maintain this as their primary residence.

Insurance Requirements
Rental homes need to have insurance coverage. You will need to contact your insurance company to find out what options are available for rental homes. Renters do come with their own set of risks, so it is important to look around to find the best rates you can. Landlord insurance is more expensive than standard home insurance, so you do need to keep this in mind if you are planning to convert your home into a rental property.

Cash Flow Concerns
As a landlord, you will end up relying on keeping tenants in the property or you can face losing money on your investment. Within about two months of a tenant moving out, landlords can start losing money on the property as they do not have a new tenant to help pay for the mortgage and costs associated with the property.

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Maintaining your home, or your rental property helps to ensure it will last for years to come. Basic maintenance and upkeep efforts will go a long way in keeping the home healthy. However, when should a maintenance inspection be done, and how is it performed? 

Home Maintenance Inspection Basics

Home maintenance inspections are similar to professional inspections done when a home is purchased or sold. Hiring a licensed inspector to come out and check on the main portions of your home is the best way to ensure all the correct areas are checked including:

• Electrical system
• Plumbing system
• Roofs
• Foundation
• Walls
• HVAC system

Many property owners do not notice if the systems of their homes are not working effectively until they do have them professionally serviced. Certain things like a water heater not heating the water as quickly as it once did can show simple signs of wear and tear. 

Home Maintenance Inspection Process

A professional home maintenance inspector will be able to take a homeowner through the property to show them what they have uncovered. If the water heater is not working to its property capacity, they can recommend replacement. Inspectors are normally kind about showing you the issues, and giving property owners ideas on what can be done. Inspectors do provide a written report stating the issues and a to-do list. 

How Often Should Inspections Be Done?

How frequently should you do a home inspection? If you are a property manager, you need to conduct a property inspection every time someone moves in and out of the property. Hiring a property management company to help with this is essential for those individuals who do not want to deal with this side of investment growth. 

Homeowners should consider a home inspection every three to five years. The cost of the inspection varies on the size of the home, the area, and the inspector you select. Home maintenance inspections are one of the best ways to keep up on the way your home is working, and an inspection will provide details on everything from the HVAC system to the roof. 
Keyrenter Property Management San Antonio specializes in creating wealth through investment. Contact our office to discuss real estate investing and property management services.

As a renter, obtaining insurance is an important step in keeping your property safe. Renters insurance is designed to cover lost, damaged, or stolen personal possessions. Some insurance policies do provide liability coverage if an individual is injured within the unit. However, far too many renters feel insurance isn’t necessary or too expensive. Here are some things to know about renters insurance and how it works.

What is Renters Insurance?

Renters insurance is designed to provide peace of mind to tenants in the event of a problem such as theft, damage to property, and more. Renter’s liability insurance protects the renters in the event of a lawsuit, and will pay for legal defense if there is a case against the tenant.  Policy holders will have a deductible that must be paid if a claim is made.

What Does Renters Insurance Cover?

Insurance is designed to provide financial compensation for tenant’s damaged or stolen possessions due to vandalism, fire, and theft. There are additional policies that do provide other coverage options, but it’s based on the tenant’s personal property possession amount. Landlords normally have insurance that covers the property itself. Some of the common things that are covered by rental insurance include:

• Furniture
• Clothing
• Jewelry
• Collectibles
• Computer equipment

Is Insurance Necessary?

Since most landlords have an insurance policy to cover the structure, many tenants do not feel insurance is necessary. However, rental insurance is a very small cost, and can cover $20,000 or more for personal possessions if something does indeed happen.

Some landlords do require tenants to purchase rental insurance as part of the lease agreement. A property management company can assist in drafting correct contracts and managing the property to help tenants understand what is required of them.

What Renters Insurance Does NOT Cover

It is important to read the policy to understand what is and what is not covered. In some situations, insurance does not cover certain things based on the policy:

• Natural disaster damage – flood insurance is normally a separate add-on to an insurance policy.
• Vehicle theft – rental insurance does not include vehicle theft. However, if the car is broken into, the insurance does cover the possessions that were taken.
• Items without a paper trail – when an insurance claim is made, some insurance companies will require proof of purchase of the item (such as a television or computer equipment).
• Roommate items – tenants with roommates need to have their own insurance policy. If the roommate has items that are stolen or damaged, it is not covered by the policy holder unless the roommate was added prior to the incident occurring.
• Pest damage – rental insurance is not designed to deal with pest problems.
• Physical property – insurance for renters is not designed to cover the physical structure itself. The landlord insurance policy is designed to cover the building and issues that occur such as a leaking roof, broken pipe, and fire.

Keyrenter San Antonio Property Management is here to assist landlords and tenants with insurance-related questions and concerns.