Four things to consider before renting out your home

Renting out your home can turn into a nightmare if not done correctly. 

There are countless horror stories about home rentals gone wrong. 

If you want to avoid major disasters, here are a few tips to get you started. 

Consider getting a real estate agent 

Hiring an agent might seem like an unnecessary expense to some, but it can save you a lot of headaches in the long run. An agent will help you find a suitable tenant, and act as a mediator should any problems arise. The agent will also handle all the necessary paperwork, which you need to make sure you read and understand. Make sure the agent you select is registered with the Estate Agency Affairs Board. He/she will handle the tenant's deposit, and their monthly payments - depending on the agreement in place. The last thing you want is a dodgy agent disappearing with your money. Make sure the agent understands that all decisions to do with the property and tenant must first be run by you. 

Screen your tenants thoroughly 

If you are not interested in getting an agent to help you rent your home, then screening your tenant properly will be one of the most important things you do. Not only do you need to check that he/she will be able to afford the place, but you also need to make sure that they have good character. 

This Reddit user learned this lesson the hard way:  "[I] used to work in lettings. We had a young couple move into a house. Two months later we got a call from a locksmith contracted by the police. The police had raided the house the night before because the young man was a drug dealer. They had literally smashed the front door frame out of the wall and the locksmith had been called in to make good." 

Here are a few things you need to tick off your suitable tenant's list: 

• Payslip
• 3 months' bank statement 
• Credit history
• Previous landlord references (to find out what type of tenant they were to avoid any drama)
• Criminal background check (if possible)

A clear contract

Make sure you draw up a clear lease agreement for your tenant. Your lease can be a fixed-term agreement or a month-to-month contract. The contract includes all your house rules including repairs, maintenance, guidelines for pet owners, overnight guests, and future rent increases. Here's an example of a standard lease agreement for South Africa.

Inspect the unit in the tenant's presence 

Once you have found a suitable tenant make sure you inspect the property in their presence before they move in. Take pictures of each room just to be safe. Tenants have been known to cause some serious damage to properties. 

"They brought bed bugs into the place, did quite a bit of damage to the walls. They also pulled out and sold 100 year old hardwood trim, removed the central air unit and sold it ... They then proceeded to skip town after being kicked out once they found out that their wages were being garnished," a Reddit user complained. 

If you don't do the inspection you might not be able to use the tenant's deposit to fix any of the damage they caused as you will have no proof that the place was not in that condition when they moved in. 

Do you have any tips or horror stories to share about renting out your home?

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