Should You Rent Out Your Home Instead of Sell It? | RealtyPin.com
NEW YORK, March 5, 2013 /PRNewswire-iReach/ -- As the home experts at Realtypin.com have pointed out, despite slow and steady progress in the housing market, many homeowners are still afraid to list their homes for sale. But what if you have to move? Do you have to forget your fears, or is there another way to tap into the value in your home without doing something that terrifies you? If you're just too scared to stick a "For Sale" sign in your yard, what about a "For Rent" sign, instead?!
After all, there are plenty of people out there who are just as scared to invest in the housing market. In fact, the demand for rental properties has never been higher – as evidenced by the sky-high rental prices in many places around the country. So, if you've got to move onto another place, renting out your home may be the way to go. That way, your home can still make you some money. But becoming a landlord means taking on added responsibilities. Before you start looking for tenants, you've got to think about these 3 things:
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1. How much you're going to charge
If nothing else, you need a tenant's rent to cover your mortgage payment and maintenance costs every month. Depending on when you bought your home, that may be a lot to ask. For example, if you bought your home at the height of the housing boom – and got a mortgage that didn't require you to put any money down – you've probably got a giant monthly payment. You'll have to make sure that your home can actually command that amount every month, which brings us to point #2…
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2. How desirable your home is
Do you live in a great school district? Near a beautiful park? Close to the bustling downtown area? Similar to a sale, the more amenities your home brings to the table, the more you'll be able to charge for rent every month. But if your home is out in the middle of nowhere – or in some other less-than-desirable location – it may be tough to command a large monthly rent payment.
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3. How you're going to deal with maintenance issues
When you're the landlord, you're in charge. So, if the air conditioner stops working, the kitchen sink starts leaking, or the bedroom window won't shut all the way, you're going to get a phone call. And, in some cases, you'll be required by law to get things (like water, electricity, and air conditioning) back up and running immediately. Are you prepared to deal with that? If not, there are companies that will manage the property for you – for a fee, of course. Typically, they charge a percentage of your tenant's rent payment, so you'll have to factor that in, too, when you come up with a price.