Renting your home? Do your “Home” Work
If you are thinking of keeping your current home as a rental property when purchasing a new family home, there are many facts to consider. A rental property can be a wonderful investment if you do your “home work” first.
If you are thinking of renting your home when purchasing a new family home, there are many facts to consider.
Consider Using a Property Manager
The first thing you need to establish is whether you can rent the old house out for enough to cover the mortgage payment if you have one. A good idea is to consult a local property management company to find out what would be a reasonable amount to ask for rent and while you’re at it, find out what the costs and benefits are in hiring a property manager. Often, this is the best option. If you put your rental under management, you will spare yourself the hassle of screening your potential tenants, generating a credit report, and drawing up the rental agreement. In addition to all that, the rental company acts as your liaison in collecting rents and arranging necessary repairs by setting up times to do the repairs in your tenant’s comfort zone.
Going It on Your Own
If you decide to handle the rental yourself, be sure to investigate the tenant/landlord rights. Every state has different regulations but be sure you know all you can before entering into a contract with a tenant. There may be special rulings for handicapped persons and your contract would need to address that. This is very important as it will direct you when you write up the rental agreement. Most office supply businesses have a variety of rental agreements. Be sure to choose one that best spells out your expectations. If you intend to have a “no pet” rule for instance, be sure your contract is clear on that.
Learn to Let Go
In addition to all of the above, you may have some emotional issues to resolve. Renting out what was once your home may be worrisome. You might be concerned that your tenants won’t take care of your home as well as you did. What if they scratch up the wood floor or let the lawn go to weeds? You have to accept that, technically, it is no longer your home.
However you do it, if you decide that renting your home is the way to go, remember that it is an investment that will require upkeep. You should expect regular repairs and prepare for them. Keep a ” slush fund” for those unexpected broken pipes or clogged drains. Remember … you still own the property and if you aren’t a handyman, line one up. You’re going to need one. A rental property can be a wonderful investment if you do your “home work” first.