You’ve found yourself in a position where you want to rent out your Maryland home. But you’re concerned about whether you can rent your house if it has a mortgage. We’re here to tell you that you can absolutely rent your house with a mortgage in Maryland!
Over 60% of residential property owned in the US have mortgages, including rental properties. Before writing your rental listing and inviting potential tenants to sign a lease, there are some important steps homeowners must take before renting out their property, especially if it has a mortgage.
By the end of this article, you’ll know exactly what you must do to prepare your home to rent if it has a mortgage and a key tip to ensure your rental property is profitable.
Can You Rent Your House with a Mortgage?
Yes! It is possible to rent your house to tenants even if it has a mortgage.
There are some limitations, though, depending on the type of loan you secured to buy the house. Don’t worry; we’ll dive into that next!
Preparing to Rent Your House with a Mortgage
Before you can accept tenants into your house with a mortgage, there are some important steps to take to ensure your house follows important regulations.
Review Your Mortgage Contract
When you purchased your house, you signed a mortgage contract with your lender stating specific terms of the loan. Sometimes, these agreements state whether the owner can rent their property to tenants. If allowed, additional restrictions may be implemented.
Before renting your house with a mortgage, read over your mortgage contract to make sure you are not violating any agreed-upon terms that could put your loan and property at risk.
Notify Your Lender
Along with reviewing your contract, you must also notify your lender that you plan to rent your house. This is especially necessary if you bought the house for your primary residence.
Certain mortgages, such as USDA, FHA, and VA loans, require homeowners to live in the property for at least 12 months before renting it out to tenants. Speaking with your lender will inform you of any implications and restrictions regarding your specific agreement.
Upgrade Your Insurance
When buying a home, you must take out homeowners insurance. When you plan to rent your house, you’ll have to take out a landlord insurance policy.
Landlord insurance covers property damages, unexpected events, and even rental loss, protecting your house and finances.
Analyze the Local Rental Market
Before you decide to rent out your house, verify that it can perform well in the local rental market. Determine how much you can rent the house for and how it stacks up against local properties.
Crunch the Numbers
As you analyze the rental market, it’s also important to crunch some numbers to make sure your house can make a profit from renting to tenants. Determine the operating costs, such as repairs, taxes, landlord insurance, mortgage payment, etc., and subtract them from the rent price to determine the monthly profit.
Tips for Renting a House with a Mortgage in Maryland
You’ve got the go-ahead from your lender that you can rent your house, and you’ve taken all of the necessary steps to prepare it for your tenants. Now, it’s time to maximize your new rental property to ensure you’re making as much profit as possible.
Thoroughly Screen Tenants
No matter how excited you are that a prospective tenant is interested in leasing your property, it’s essential to conduct a thorough tenant screening. This means verifying their income, credit score, past evictions, and more through official documents and tenant references.
When you verify that prospective tenants are a good fit and can afford to rent your property, you will lower the risk of property damage and eviction.
Write a Solid Lease
The lease agreement is one of the most important documents involved in renting your house. A lease is a legal agreement between the landlord and the tenant. It outlines the rent payment terms, lease validity, and stipulations for renting the property.
Many owners may feel tempted to find a standard lease online. Being one of the most important documents, we recommend working with a real estate professional to write a solid lease.
Depending on the state where your property is located, your lease may require certain clauses or wording to be compliant as well. So, working with a real estate professional or lawyer in your state will ensure the lease abides by local rental laws.
Consider Hiring a Property Manager
Often, homeowners decide to rent their houses because they have found themselves in a position we refer to as “accidental landlords.” Circumstances require the owners to rent their homes to tenants due to active military duty, job relocation, etc.
This is where a professional property management company can be super helpful. A property manager will handle the day-to-day tasks required to maintain your property. This includes coordinating maintenance and repairs, collecting rent, and conducting routine property inspections.
Working with a property manager means that your home is in great hands. Your tenants are cared for, and you get to sit back and relax. Plus, it’s proven that property managers can help boost tenant retention, meaning you’ll maximize your rental income!
Rent Your Maryland House with a Mortgage with Mainstay Property Management
Do you own a home in Maryland that needs to be rented out but has a mortgage? Then, Mainstay Property Management is here to help!
Even with a mortgage on your home, you’ll likely be able to rent it to tenants. With professional help from Mainstay Management, the area’s leading property management company, we ensure your property complies with local rental laws and your mortgage lender.
Want to learn more about how you can rent your house with a mortgage in Maryland? Contact us to speak with a Mainstay real estate professional today!
Did you find this article interesting? Make sure to read Tax Deductions to Maximize Rental Income next!