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Home Rental: Why Renting your Home May be Advantageous

While it is not advisable for all homeowners to rent out their properties when trying to sell them, but in some cases it can be surprisingly advantageous. This can be particularly true if you are selling and moving rather quickly. Individuals who are wishing to retire and considering moving to a new locale might also find benefits in renting out their homes on a short-term basis. Such a move could allow them to rent a property in the new location while simultaneously collecting rent on their own property.

The best advantage of renting out your home on a short-term basis, while firming up your moving plans, is that it allows you to keep your options open. To make sure that the process goes smoothly on both ends; however, it's a good idea to review the following tips:

First, take the time to gather some critical information on your local home rental market. Generally, it can be a good idea to rent out your home  temporarily until you are actually ready to sell your property but first it's important to find out how strong the demand for rental property is in your local area. If the supply of rental properties in the local area is larger than the demand, you could find yourself in a situation in which you are not able to command as much in home rental income.

You can check with local realty firms to find out exactly how strong the home rental market is in your local area. An agent with such a firm should be able to give you a fairly good idea of how much rental income you can reasonably expect to receive on your property based on the current market.

It's also important to put pencil to paper and do some calculations to determine exactly where you will be financially by renting your property. Of course, it's only natural that a home owner wants to make money by renting out their property. Ideally, you should be able to cover the monthly mortgage payment on the property as well as cover your insurance and property taxes. Problems arise; however, many home owners fail to take into consideration factors such as the cost of home maintenance and repair issues. You will still be responsible as the home owner for these maintenance costs. Typically, it's easier to pay someone else to handle these problems rather than trying to tackle them yourself. These are costs that must be taken into account or you could find yourself with a negative cash flow rather than a positive cash flow.

When considering renting out your home it's also a good idea to think about changes in your taxes due to the rental income. Be sure to speak to your accountant about the possible financial and tax implications this may involve.

In addition, you will need to be prepared to empty your home completely before your renters can move in. This means that if you are down sizing to a smaller property before you are ready to sell your first property you will need to either put some items in storage or sell them.

When you are ready to actually rent out the house, consider using the services of a professional property manager. This can help you to avoid many of the hassles and problems associated with being a landlord while still taking advantage of some of the benefits. With this type of arrangement you do not have to worry about having any direct contact with the tenants.

Finally, you must be ready to have the renters move out when the time does come to sell your home. Agents commonly report that it is far more difficult to sell a property when rental tenants are still living there than when it is empty. This is because tenants can both knowingly and unknowingly be a detriment to the sale. Some can even deliberately put roadblocks in the way of your selling the property by leaving the house filthy and making it difficult for the property to be shown at all. Ideally, it is best to try and have any tenants moved out of the property at least four weeks before you plan to place it on the market. This gives you sufficient time to handle any cleaning and/or repair issues that need to be handled before the house is ready to be shown to prospective buyers for the first time.

Remember that renting out your property on a short term basis can provide you with numerous benefits, including flexibility, provided that you take the time to do your homework and ensure everything is professionally managed.



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