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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