So you find yourself wondering what’s next? Maybe you have job prospects elsewhere, are looking for a new adventure, or need to make a move back to your hometown to take care of a family member. Life is unpredictable sometimes, and we all know that the world throws us curve balls every step of the way. So if you are a homeowner that, for some reason or another, needs to make a change, you might be facing the prospect of a stressful move. And yet, selling your home is not the only option. Many homeowners might turn to the possibility of putting their home up for rent. But is it a good move for you? We’ll take a look at some things to keep in mind when considering putting your house for rent.
Moving is stressful no matter the circumstances. If your situation has recently changed but it might be a somewhat temporary change, you might consider not selling your home right away.
Will Renting My Home Be Profitable?
The prospect of a passive income is quite enticing. Everyone likes to have reliable income that comes in. Of course, in the case of a rental property, that income is contingent upon someone else paying their rent. So there is always a risk. One of the main things to consider is whether the property will generate a reliable cash flow. One way to do it is to add up all the expenses of renting out the home and subtract them from the money you will make as a landlord. So what are some of the expenses you face as a landlord? Here are just a few to consider:
- Mortgage
- Insurance
- Repairs
- Taxes
- HOA
- Management fees
- Vacancies
- Commission
- Advertising
Things to Think About Before Committing:
There are several pros to renting out your property, but you don’t want to do it blindly. Go in with the necessary information and make it a pleasant experience.
#1 Know your current mortgage terms. Some mortgage loans do require that you occupy the residence for at least a year before you put it up for rent. These are usually home mortgages for primary residences. It might be troublesome if you try to turn your home into a rental property before you have reached the required timeline.
#2 Understand the responsibilities of a landlord. Becoming a landlord is not devoid of responsibility. There are plenty of obligations that landlords must deal with on a regular basis. These include but are not limited to repairs, property damages, and so on.
#3 Know your financial situation. Remember that a rental agreement is a legally binding contract, so make sure you figure out your situation before you enter into a rental agreement. Otherwise, you may find yourself without a place to live and your home already rented out. Plan ahead to avoid extra headaches.
Early Steps After Deciding to Rent Your Home
There are a couple of things you can do as you decide to turn your home into a rental. Here are some of the first steps to take:
- Talk to a CPA or Tax Professional. Owning a rental property is considered an asset and comes with different taxes and tax breaks, so consult your trusted CPA and find out information ahead of time.
- Call your insurance policy. Many property owners assume they can get by with regular home insurance but this isn’t exactly the case. Make sure to let your insurance know that your home is being turned into a rental property.
- Consider a property manager. Handling the rental duties on your own can be quite the task, especially if you are relocating to a different city or state. Having a property manager will make sure that you have someone locally taking care of everything.
- Fix up the property. In order for your property to be marketable as a rental home, you want to make sure there are several updates or renovations done. This depends, of course, on the current condition of your home.
Common Questions and Concerns of Landlords
What happens when facing an economic downturn?
Landlords all have learned during the times of coronavirus, that being a landlord does come with its responsibilities. During the pandemic, many people could not make the rent and this significantly affected many property owners across the country. Always have a rainy fund for your property in the case that your renters were not able to pay the rent.
Does insurance go up?
When turning your property into a rental, you will likely have to get a different policy from your homeowner’s insurance. They will advise you as to the best policy in order to better protect yourself and your property.
Contact Reliant Property Management, Today!
There are certainly some things to consider before putting your property up for rent. And yet, once you figure out the logistics or get a reliable property manager to handle the tough stuff, you may find that it is a perfect solution for your circumstances. Here at Reliant Property Management, we focus on making being a landlord simple and straightforward. We take care of everything. Call us and let us know how we can help handle your property.
