How to Rent Out Your House in Chicago, IL

Key Takeaways

• Renting out your home can be a smart move. It’s a great way to earn a steady income, benefit from property appreciation, and enjoy tax advantages—especially if selling isn’t the best option right now.
• Decide if being a landlord is right for you. Managing a rental property involves several responsibilities, so consider whether you have the time and knowledge to handle it yourself or if working with a property manager would be a better fit.
• Prepare your property for renters. A thorough inspection, proper insurance, and making the home attractive to tenants are key steps to ensuring a smooth and successful rental experience.
• Set the right rent and create a clear lease. Researching comparable properties helps you determine a fair rental price, while a well-drafted lease agreement minimizes misunderstandings and keeps everything running smoothly.

Selling your old home isn’t the only option you have after you move into a new home. A great option is to rent it out instead, especially if you cannot get a good offer on the table.

A rental property can help you earn a regular passive income, enjoy rising appreciation rates, and take advantage of many tax deductions, among other things.  

To be a successful landlord in Chicago, IL, though, you’ll need to be intentional and follow through with certain proven strategies. Luckily for you, this blog by Keyrenter Chicago Metro has you covered. 

How to Successfully Rent Out Your House in Chicago, IL

Know Whether Landlording is For You 

Being a landlord isn’t always easy! It involves a variety of tasks that can be quite demanding if you decide to handle the property management yourself. To gauge whether you can self-manage the property, ask yourself the following questions. 

• Can I determine the rental rate?
• Am I familiar with both state and local landlord-tenant laws?
• Do I have the time to manage the property on a full-time basis?
• How will I be able to rent to quality residents?
• How will I be able to handle repairs and maintenance?

Finding the right renter starts with a consistent tenant screening process, which can help you evaluate applicants and make more informed leasing decisions.

If these are responsibilities you can handle, then go ahead and manage the property yourself. Otherwise, your best bet for becoming a successful landlord is just to work with a property manager. They will handle everything, freeing up your time to do other important tasks.

Get Another Mortgage

Now that you plan to move out, you’ll need to obtain another mortgage.  Your lender will require you to meet certain requirements, though. Including a high credit score, sufficient income, a lower debt-to-income ratio, and a down payment.

Fortunately for you, the qualification process may be easier due to the potential for an additional revenue stream. However, some lenders may not put it into consideration at all. Either way, be sure to inquire with the lender whether they will factor in the expected rental income.

Get a Proper Insurance Policy

Renting out a property comes with its own unique set of risks. And this will require you to obtain a landlord’s insurance policy, as a homeowner’s insurance policy won’t provide sufficient cover.

A standard landlord insurance cover usually protects against possible perils like:

• Structural damage to the property.
• Damage to things like maintenance equipment or outdoor features like pools and sheds.
• Damage caused by natural disasters like fire, hail, and lightning.
• Loss of rent after the unit becomes uninhabitable due to a covered peril.
• Legal fees that come about due to disputes.
• Any injuries that occur on the rental premises.

Have the Property Thoroughly Inspected

Do this to ensure your Chicago property meets the basic habitability standards. Otherwise, you may be in violation of the state’s habitability laws if you rent it out with some serious issues. Such as, if it has issues like mold, pest infestations, foundation issues, or a leaky roof.

Unless you have prior experience, consider working with a professional property manager to help unravel any issues the home may have. And while fixing the issues may cost you money upfront, it can save you from potentially costly repairs later down the road.

Make the Property Rent-Ready

Taking care of the basics isn’t enough when it comes to renting out a home successfully. Aside from ensuring the property is livable, also go a notch higher and make it attractive to potential residents.

You may need to do a lot or only a little, depending on the condition of your property. The following are some of the things you may have to do.

• Thoroughly clean the unit.
• Make a good first impression by boosting the property’s curb appeal.
• Upgrade the look and feel of the kitchen.
• Remodel the bathroom to make it more modern.
• Test all appliances to make sure they are working as they should.

Determine the Rent Amount

Setting the right rent and clearly defining it in your lease agreement for your Chicago rental property is key! It’ll help you, among other things, enjoy a good cash flow while ensuring you don’t undercharge or overcharge residents. To know how much rent to charge, consult landlords renting out similar units.

Alternatively, you could go online and look up the prices of comparable properties. Ensure you’re using the right filters to get the right results, though. 

Draft a Proper Rental Agreement 

Depending on how you draft it, this can make or break your rental investment! For minimal conflicts or misunderstandings, make sure the rules are as detailed as possible. Be clear on things like:

• Amount of rent due every pay cycle, and when and where it’s due. 
• Pet and smoking policies. 
• Conditions for the return of the security deposit. 
• Repair and maintenance responsibilities. 
• The term of the lease. 

Conclusion

There you have it. Expert tips on how to convert your Chicago home into an investment property. And the best part is that you can hire a property manager to help handle all the day-to-day activities. Such as, filling vacancies, collecting rent, property inspections, and lease drafting. 

You can rely on Keyrenter Chicago Metro to help you succeed. We provide full-service property management services to rental property owners in Chicago, IL, and all the surrounding areas. Get in touch to learn more!