As a Michigan homeowner, you may be considering renting out a house you own to supplement your income. But you should be aware not only of the upside, but also the responsibilities and potential downsides.
Being a landlord can be a wonderful way to add another income stream to your financial situation. But it’s crucial that you understand the basics of renting your home before embarking on that path.
Know the relevant landlord laws
The landlord-tenant relationship is the subject of a great deal of laws, both at the state and federal levels. It’s vital that you take the time to familiarize yourself with what you can and can’t do as a landlord and what your tenants’ rights and responsibilities are.
Many first-time landlords get into trouble by acting according to their assumptions rather than the law, so make extra sure your actions as a landlord fall on the right side of legal.
Vet your applicants carefully
The two biggest issues that can cause you headaches and harm you financially are tenants not paying rent and tenants doing significant damage to the property. Your best defense against this is preemptive – Be sure to screen your potential tenants well.
Obtaining a credit report can help you find more reliable tenants. And you can also consult public records for any past criminal issues. Doing these checks can save you serious problems down the line.
Understand all the financial benefits
If you want to maximize the financial benefits to being a landlord, you’ll need to understand how you can use our tax code to your advantage.
A range of deductions and benefits exist for renters in the tax code, from depreciation to rental property deductions. If you’re not using these, you’re leaving money on the table.
Renting out your house can be a lucrative way to make your property work in your benefit, but it’s crucial that you understand the basics of being a landlord. Knowledge of the law and tax codes and careful screening of your applicants will greatly increase your chances of a smooth and worry-free experience.