There’s a lot to think about when it comes to buying, selling, or renting your home. They are all so intertwined together. Today we are going to talk about the SELLING END OF THINGS.
If you are a potential seller, you may decide to rent your property out to tenants, instead of selling. Maybe you want to keep it for future income. Or you may want to avoid capital gains at this time.
Having the income from a rental unit, each month, is nice. If you have a mortgage on the property, the tenant will help you pay it down. Also, it isn’t a great idea to leave your property vacant if you won’t be living there, so tenants can keep your home free from theft and vandalism.
Keeping your house and renting right now may be a good idea in today’s economy, since you MAY get more for the property in the future. Rentals are a good investment overall.
Are You Ready to Be a Landlord?
Being a landlord can be challenging, but if you know the pros and cons ahead of time, and you are ready to mitigate the risks, it can also be very worth your while.
First, you need to make sure you are making the best decision for you and your family. That is, can you afford to keep the property? Consider all your possible expenses such as the mortgage payment, municipal taxes, home and/or liability insurance. Always make sure you have a buffer to cover financial emergencies.
You should also ask yourself if you’re ready for interruptions in your family life when tenants lock themselves out or if there is an emergency at the property. If not, consider hiring a property manager.
Ensure the Best Tenants are Renting Your Home
Then make sure you find the best tenant possible for your property. Here are some things you can do to get to know them:
- Make sure that you look at the potentials renter’s credit history (for this, you’ll need their written consent).
- Check the past two landlord references. This is very important, unless they never rented before.
- Ask for at least two personal references, that are not related. These will help you get a sense of the tenants’ character.
- Speak with their employer. Ensure that their job is stable and their income will cover their living expenses (or your will be paying them yourself).
- Most important of all, trust your gut instinct.
Keep Your Renters Happy
Don’t forget to consider the cost though. You’ll have regular maintenance to upkeep the property. Remember a happy tenant is usually a longer-term tenant, so you’ll want to keep things in good repair. Also, each time a tenant moves out it will cost you money for cleaning and repairs.
Do your best to make the home as nice as possible, within your budget. It is a good idea to go into the home at least twice a year and check for maintenance issues like leaky taps, clean out the eaves trough, and check for mold in the basement. You may also have to do the grass cutting, yard work or snow removal, depending on your rental agreement. Be sure to keep open lines of communication with your tenant.
We’ve had great experiences with rental properties. They can be a great investment! Just be prepared to be in it for the long haul. In today’s market, it’s a great time to buy. That means, on the selling end, it takes a little longer and you might not get the price you are looking for. More than likely, this will change in the future. Real estate cycles always prove to increase over the year. When it dives, it always comes back. It just takes time.
If you need help deciding if renting your home is right for you, or if you’d like help to get your place rented, just give me a call or email today. Also, check out this video on becoming a landlord.