Many people have considering renting out there home. The thought may have even crossed your mind: what if you find a new job in another state, or you get transferred – should you sell your home or rent it out? There are several factors to think about before making such an important decision.
Reasons to Keep Your Home
Ask yourself these questions to decide if you should keep ownership of your home.
1. Do you like your home enough to keep it in the event you decide to move back?
2. Do you want the tax break through your property’s depreciation?
3. Do you want to use your home as a retirement investment?
These above are good reasons to keep your home, but there are other things to consider that could outweigh those benefits. For instance, are you prepared to become a long-distance landlord, or possibly hiring someone to manage the property?
There are also other costs involved, like advertising, turning costs (cleaning and painting between tenants), taxes, insurance, utilities when your property is between tenants, etc. In order to assess these costs, you may should have your Realtor check the numbers in your local market. Expenses can run 30 to 40 percent of income before your monthly mortgage cost.
Becoming a Landlord
Once you decide to rent out your home, you’re going to need to know how to become a landlord. First, you need to get the house in move-in condition so you can get the highest rent. This includes the inside and the outside of your property. Start patching and painting, carpet cleaning, and fixing major appliances, etc. Doing this will make a big difference!
Now it’s time to think about setting the proper rent amount. As always, Location is king when setting prices. You can contact a nearby property management company to help you research prices in the area, or you can ask your Realtor for some pricing advise. If you set your price too high, you may have a hard time finding a tenant, if you set it too low, you may be losing a lot of money.
Should You Hire a Property Management Company?
Hiring a property manager may not be necessary, but it could definitely make your life easier, especially if you are moving out of state. Think about interviewing three companies, and ask about their experience, references, tenant screening, maintenance, eviction handling, insurance, and any special services they offer.
