Renting a house is a big step for any property owner. It’s venturing into a new area of life and involves a lot more than most people first suppose. When you rent a property, you are providing more than just a simple place for someone to live. You become responsible for a whole host of things. (Some of which will come out of nowhere.) But first, let’s take a quick look at if it’s a good idea to rent or to sell the house.
Should You Rent or Sell?
When you are considering renting a home, you’re probably doing so because of a life change. It could be due to a job change or relocating for an employer. Or, it might be time to move into a bigger house or downsize. The point is, you must consider the fact that it’s not necessarily always the best choice to rent it out. (Even if in some instances when selling means taking a loss or getting very little in return.)
“It doesn’t take much to turn an ordinary homeowner into a landlord. Maybe you have to move but want to keep your home and rent it out. Or you have a change of fortune — you get married, receive an inheritance or buy a new house before you unload the old one. While many people would love to have an extra house to worry about, owning even one rental property can be a headache.” —MSN Real Estate
Basically, you need to run the numbers more than once. And, be very honest about the costs. This includes not only the mortgage payment, but also, the other monthly and yearly expenses. Then, there’s the matter of being a landlord. How comfortable are you with assuming that role? And, even if you are, how do you feel about someone else living in the current place you call home? As you can see, there’s a lot to think over and think over seriously.
Here’s what You need to Know about Renting Out a House
If renting is a feasible situation, then you should tread lightly. Don’t jump right into a long-term commitment, like a two- or three-year lease. Now, here are some of the things you need to do to rent a home and make it a good move:
- Set the right market-based rental rate. A big mistake is to base the monthly rental rate just on mortgage and insurance alone. There are still property taxes, maintenance, and more expenses which you will incur. So, find comparable properties and base your rental rate on the market. Remember, you can’t set a rate based solely on your expenses. It must also be supported by the market or it simply won’t rent.
- Hire a good property management service. There are very few people who can handle all that comes with landlording. It’s a huge responsibility and can easily be interruptive. Plus, tenant calls for things like appliance breakdown can come at any time. So, you’ll need a property manager and that means having to find one that’s reputable and reliable.
- Identify go-to contract service providers. If you do take on the landlord role, be prepared to deal with various emergency situations. This means, you’ll need to find service providers, like a plumber, electrician, HVAC, and others.
- Create an exit plan to follow when it comes time to sell. You’ll likely want and/or need to sell the property at some point. So, don’t let this sneak up on you. Have an exit plan ready-to-go when it’s time.
If you’re going to sell your home in the near future and buy a new house, please don’t hesitate to phone me at 407-616-7286, I’ll be happy to speak with you.