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How To Rent Your House in El Paso
So you are still undecided on how to sell your home. You’re not sure whether to sell by yourself, use a real estate agent, or sell to cash home buyer. There is another option you could consider, and that is put your house up for rent. Let’s find out how you can rent your house in El Paso.
Before we start, this blog post assumes that the owner has already made the decision to rent out their home.
Making the decision to rent your home can be difficult and should be researched and thought about carefully.
Check out these articles if you are still not too sure about renting your home:
As a side note, you should consider hiring an attorney. With a house rental there is paperwork that needs to be filled correctly in order to avoid confusions that may lead to lawsuits and potential years of stress. All paperwork can be run by your attorney to make sure it is done properly and lawfully.
House Condition
First step to rent your house in El Paso is to consider the house’s condition.
As common sense dictates, it is important to have your house looking nice and pretty if you want people to consider living there.
But this begs the question, what exactly is “nice and pretty”?
Unfortunately, different people have different standards and opinions on what they would consider to be an attractive house. So in what kind of conditions should your house be in if you want to rent it?
The first thing to consider would be any major building code violations.
Unfortunately, as Devon Thorsby of U.S News explains, a previously occupied home will more than likely have some sort of code violation. Which means that if you were to get a city inspector to check for code violations, you will end up with a long list of them.
So ultimately the best thing to do is check for major damage, especially that which can be threatening to someone’s life; and by that we mean:
- Missing ground-fault circuit interrupter/s
- Missing smoke alarms
- Faulty fastening of deck ledgers
- No bathroom venting (humid air has to be pumped to the outside to prevent wood rotting)
Read more about code violations:
Codes for the El Paso municipality can be found here.
Furthermore, if your house needs the total remodeling of a room, roof work, or something that could be considered major, then do not make the mistake of not getting a permit before doing that remodeling work. It will be counted as a major code violation which will cost you. This is because, as Thorsby said in her article, when a major project like this needs to be done, inspectors will ensure that all the work done is up to code.
To conclude this section, put yourself in the shoes of someone who is looking for a house to rent. Would you live in a house that is all withered and ugly? Probably not.
If your house needs some paint and work to improve its looks, then consider doing so. However, keep in mind the costs and your ability to actually perform these improvements.
Brandon Turner of Bigger Pockets asked his readers about how much improvement is considered okay for a rental home.
He received multiple great responses, which I would highly recommend reading. In my opinion, the ones to consider the most would be Joffrey Long’s response and also Seth Williams’.
Keep in mind if the money you’re going to spend will actually make your house look nice and if the repairs being done will save you headaches further down the road.
Rent Charge
Next step to rent your house in El Paso is to figure out what is the best price to charge for rent.
To do this you should perform a market research, which should consist of figuring out what price homes of similar size, location and condition are renting for. [1]
Basically, the whole gist of it is to use different tools available to you to help determine your rental rate. The best thing to do first would be to cruise around your neighborhood and check to see if any houses are up for rent. Investigate what the rental rates are for those homes.
But the best tools would be on the internet. Craigslist and Zillow should lead the way for your online research. Also the site Bigger Pockets has a cool guide to help you determine a fair market rental rate.
Another great tool if you’re looking to rent your house in El Paso is to check this page from RentData.org. In there you can find fair market rates for the El Paso county. Keep in mind however, that you should not exactly charge the amount seen in that page. It is always important to actually perform a market research.
Security Deposit
If you’ve ever been a tenant, then you know that you have to pay a security deposit.
A security deposit is basically an insurance against damage that may be done to the house by the tenant. It is not a fee and it should be refunded after the tenant has left the rental property. [1] In Texas this refund should occur within thirty days after the tenant has left.
As of the publishing date of this post, the state of Texas does not have a limit on what landlords may charge for a security deposit. (Read the linked article for more info on deposits).
This does not mean you should just charge really high for a security deposit. Some landlords typically charge about a month’s rent worth [1], but I recommend investigating security deposits alongside the rental rates to ensure a fair amount is charged.
You should also keep in mind the tenant’s rental history when deciding on an amount to charge for the security deposit. Typically, a bad rental history should mean a higher security deposit; or if you really want to be cautious, then don’t rent to a person with that kind of background.
Tenant Screening
Speaking of tenants with a shady rental background, you definitely want to make sure that the person you rent your house to is responsible, mature, and overall a good person. Otherwise, you’re looking at potentially years of difficulties and stress.
But before you conduct a screening of tenants you have to actually find people who are looking for a house to rent.
In this day and age it is very easy to advertise with social media.
Sites like Facebook, Twitter, Instagram, LinkedIn, Snapchat, and Pinterest allow you to advertise (for a cost) to certain demographics. That is, you can target people of a certain age, income, education level, etc.
Another great site to advertise on is Craigslist.
Now that you have candidates, it is important to pre-screen them. Brandon Turner of Bigger Pockets recommends the following to make sure you don’t waste your time with people who are not qualified:
- Their gross monthly income (income before taxes and deductions) must be more that three times the amount you’ll charge for rent. If they are not employed then don’t even bother.
- Good credit.
- References from all previous landlords (if they have any).
Rent Prep also has a list for pre-screening, which includes: no criminal history, 600 credit score, and no previous evictions. All of which should ensure a good tenant.
It is safe to say that if they do not meet any of the criteria above, then you can move on to the next candidate.
***IMPORTANT NOTE: It is illegal, everywhere in the United States, to discriminate on the basis of religion, race, gender, national origin, skin color, disability, family status, or veteran status. DO NOT deny anyone housing for any of these reasons.***
Now that you have potential tenants, you need to show them the house. I would recommend having a set time to show them the house. If they agree to that particular time and they don’t show up, then it is their problem.
Rental Application
It is good practice to hand an application to everyone that shows up to see your house. [1] This allows you to learn more about the candidate.
It is also common practice to charge a fee for the application. This helps cover the cost of running a background check on a tenant. [1] In Texas, there is no limit to what you can charge, but obviously you should charge a reasonable price. When performing a market research to figure out the price to charge for rent also investigate what other landlords are charging for an application.
In here I have found a good application you can use, but you can find other ones online.
The application should include a release of information signature. When someone signs this they are giving you permission to check on their job status, income, and rental history. [1]
If they sign this, then go ahead and verify all that info.
Credit and Background Check
You have done everything outlined here and have ended up with a small pool of great candidates. It is now time to delve deeper into their background.
Fortunately for you, you can use Bigger Pockets’ Smart Move to check their backgrounds.
You can also use Zillow to help you make a decision. Zillow actually gives you an application that the potential tenants can fill. From that info you can get a background check and credit history.
From that information you can make a decision to rent or not rent to person. Do you want someone who’s been convicted of a felony? How about someone with a low credit score? Also keep the market in mind; and remember, do not discriminate.
Accepting or Denying an Applicant
In Texas, it is within the limits of the law to deny an applicant if they do not meet your rental criteria.
Always ensure you explain to them (usually a written notice) why you are denying them (e.g. low credit score, not enough income, felony). This way discrimination lawsuits can be avoided. [1]
Also, it is recommended to ask for a deposit from an applicant who is well qualified. This way you can be sure that they actually have the intention of occupying your house. There is no shortage of people who apply to multiple places and end up leaving you hanging if they prefer the other places. [1]
This deposit can turn into the security deposit and it is also non-refundable. [1]
Alongside the deposit, you should also fill a holding deposit agreement. Basically, this agreement states that if the applicant does not move in and sign a rental agreement, then that cash if for the landlord to keep. [1]
Rental Lease Agreement
There are many websites that can offer you a rental lease agreement. A simple Google search will yield tons of results, which can overwhelm you since it may be hard to decide which one to get.
I recommend getting help from your attorney.
Your attorney can make sure you have a rental lease agreement that is clear, concise, and leaves little room for interpretation.
This is very important. You want to make sure the tenant understands what you expect from him/her, that way you can avoid legal issues; or in the event of a lawsuit, the court will rule in your favor.
Furthermore, within the rental agreement there should be a section that informs whether you want a month-to-month rental agreement, a year lease, or something else. [1]
A month-to-month lease will offer the ability to quickly remove a tenant if for whatever reason things didn’t work out, but ultimately it is up to you what kind of rental agreement you want.
Once you have your rental lease agreement you want to meet with your tenant and sign it.
When doing so, make sure to go step by step to ensure the tenant understands everything. I cannot stress enough the importance of leaving no room for interpretation or misunderstandings.
First Rent Payment, Move-In Report, and Finalizing
Congrats! Pretty much at this point everything in your effort to rent your house in El Paso has gone well.
At this stage of the game it is appropriate to ask for the first month’s rent. [1]
Don’t accept cash as a form of payment or personal checks. Accept money orders or cashier’s checks. Just to be on the safe side of things. [1]
Also, you may want to consider having the tenant mail you the money instead of you personally picking it up. [1]
Once that is done, create a move-in condition report.
This report details the condition in which the tenant received the house. Be as detailed as possible. If something doesn’t work, make a note of it; if a light bulb needs to be changed, make a note of it; if there’s a hole in the wall, make a note of it. This will keep everything clear when the tenant moves out. [1]
And it is pretty much at this point that you are done.
Final Thoughts on Rent Your House in El Paso
Be sure to call your mortgage company to let them know that you no longer live in the property. [2]
Before the tenant moves in be sure to secure landlord property insurance. [2]
Finally, there is the option of hiring a property manager. [1] [2]
A property manager can perform duties such as:
- Advertise for new tenants
- Collect rent and,
- Schedule maintenance
Of course it will cost you, but it can save you time to have all this done by someone else.
Alternative Option
The journey to rent your house in El Paso seems like too much? Or maybe you’re a landlord who is tired of having to manage a property?
Worry no more.
Here at EP Real Solutions we can buy your house even if it has a tenant. We offer to buy your house quickly and in cash. No need to rent your house in El Paso or feel pressured to keep on land-lording.
Call us at (915) 247-6043. We’re here to help.
The information presented in this article is for educational purposes only and should not be considered legal, financial, or as any other type of advice.
Primary Sources Used:
[1] Bigger Pockets: How To Rent Your House: The Definitive Step by Step Guide
[2] US News: 5 Steps to Renting Out Your Home