Have you been thinking about renting your home? Here we discuss some procedures and pros versus cons.
Some reasoning behind renting your home may be; the market is in trouble, you tried to sell your home but couldn’t, it may be the best option for you if you are planning on moving back to that home at some point in time (most applicable to the military of Fort Drum). While these are all valid reasons and thoughts behind this choice, a lot of evaluating needs to be done. Speak to your BridgeView agent about other options that may be more beneficial to you. So much effort goes into renting out your home, you may want to weigh out the different pros and cons that this could bring on you.
Some pros may be that you can keep your property and sell it at a later date. this can allow you to build equity and hopefully let you sell it for a higher price later in time. This also allows time for the market to change and may allow you to sell your home at a more appropriate price. Another pro to renting could be that you could charge enough to cover your mortgage payments which would allow you to have more reserves for emergency repairs. You also may be eligible for tax breaks if you rent out your home. To be eligible your expenses would have to offset your income, which is never the best scenario to be in, even if it allows you to have a tax break.
Unfortunately there are more many more cons than pros in renting situations. You have almost more responsibility when you become a landlord for your tenants if you do not hire someone else to handle it for you. You must be prepared to resolve any issue your tenants may have, and set aside funds to take care of repairs or maintenance that the house may need. As mentioned before, you may be able to charge enough rent to cover your mortgage. Oftentimes this is not the case, and then you must pay the difference of what you owe. Another con is that your tenants may damage your property and detract some of its value during the time that they live there. It is also quite common that you would have to pay more in homeowner’s insurance when you are renting out because your home is no longer occupied by the homeowners.
When looking for tenants, it is important to be very specific of what you want and expect from them, and crucial to have it in a document form. A common point for many renters is the allowance of pets in a home. If you say no to pets you may limit the amount of renters in your market, but if you say yes to pets there is a greater chance of damage done to your property. As the person renting out the property, you need to have several back up plans in place for when things go wrong. What will you do if your tenants don’t give you rent on time? How will you pay their difference? How diligent and strict will you be in terms of gathering payment from the tenants? Back to home repairs and maintenance, how timely will you be in taking care of these issues? Lastly, and important to think about, how will you deal with major conflicts between you and your tenants?
So while you may believe renting out is your only option or the best way to go about dealing with your home, we strongly suggest you weigh other options and discuss it with your BridgeView agent. On average, it usually costs much more to rent out a home than many think. Renting out a home requires so much time, effort, and money, make sure it is what you really want before you start.