8 TIPS FOR RENTING OUT BLACK HILLS HOMES WHILE WAITING FOR THE MARKET TO RECOVER

A growing number of home sellers are having to get on with the next phase of your life, even though your home has not sold. Many of you decide to rent your home. It's not the end of the world. Here are some tips to get started.

1. Make a Plan
This is too big a venture to just stumble in to it. Consult other landlords. Google for guidelines and checklists. Read a book, such as Danielle Babb's The Accidental Landlord.

2. Set a Fair Price
Check newspapers and Craigslist for competing similar rental units in your neighborhood. Keep in mind that due to this market a lot of other people are also renting. But fortunately, for the same reason many prospective buyers could not buy your home, they are not buying others either. They are renting. In the Rapid City area, rental property occupancy rates have been exceptionally high. Demand has generally exceeded supply, so you are probably in luck.

3. Screen Your Tenants
Do what the big guys do. Ask for references who can vouch for payment or damage history. Ask for proof of income sufficient to make rental payments.

4. Know the Law
Bone up on Federal and State fair housing and landlord/tenant relations. In South Dakota, be sure to read the landlord/tenant section in the State Attorney General's Consumer Guide.

5. Learn How to Manage the Tax Consequences
For example, recall that the Capital Gains Exclusion when you do sell, is limited to if you lived in the home at least two of the past five years. It's a good idea to consult a tax advisor at least when you go in to this venture.

6. Manage Insurance Coverages
Both you and your tenants need proper insurance. Consider whether the tenant's rental insurance should name you as an "additional insured." Consider an "umbrella policy" for yourself. If unsure, be sure to consult a comprehensive insurance advisor before you sign any thing with tenants.

7. Plan for Inevitable Maintenance and Repairs
Make sure the rental contract spells out clearly who is to do what categories of routine or major M&R, and what the deadlines are for resolving maintenace problems. Do you really want to unplug a toilet at 2am? If not, who will? Who will decide who will?

8. Decide Whether to Engage a Rental Management Firm
Even if you don't intend to use one, consult with a highly respected firm first. Be sure you learn first hand, not just from a friend who "has lots of rental properties and shucks, I never pay good money to a property manager."