So it is time for you to move. You see articles in CNN Money and Time Magazine, that talk about how, thanks to the millions of forecloures, we are fast becoming a nation of renters. You have a friend who is building equity on his rental - seems he is minting money (not sure what he is not telling you). Perfectly understandable that you ask your Realtor (as opposed to real estate agent) to put your house up for rent.
As home values continue to plunge, a growing number of homeowners are choosing to rent their homes instead of selling. With interest rates at historical lows, it is also a fantastic time to buy investment property and rent it out. Congratulations, you are on your way to become a landlord!
However, before you jump in - here is a quick checklist.
1. Has your Realtor given you an assessment of current rents and home values in your neighborhood?
2. Will the rent cover your mortgage + renters insurance + real estate taxes + cost of finding a tenant?
3. Are you allowing for a small buffer for the times when you property may be vacant between tenants? Also general updating - painting, maid service, carpet cleaning, minor repairs between tenants.
4. Will you be hiring a management company? Management companies typically charge 8-10% based on services provided.
5. If not - will you be living locally or do you have friends and family who can pitch in times of need? Connecting with handymen, checking basement for water during storms, even running a spare key to the tenant in need...?
6. Will you accept tenants with pets?
7. Do you understand the tax implications of becoming a landlord?
8. Do you have the down payment for your new home?
9. Will you qualify for the mortgage on your new home? Total debt to income ratio is key in mortgage approvals.
10. Above all - are you ok letting strangers into your space? No tenant will maintain your home the way you would.
If this checklist does not faze you - you are the perfect candidate for becoming an "Landlord". Ofcourse - the real estate market does not swing back and forth easily - so all decisions you make must be relatively long term ones.
Remember it starts with understanding the current market value of your home, and the going rent in your neighborhood. Call or write to Bela Vora today and get a free consultation and analysis for your home. Lets have the rent vs sell discussion soon.
Other articles with real estate tips
As home values continue to plunge, a growing number of homeowners are choosing to rent their homes instead of selling. With interest rates at historical lows, it is also a fantastic time to buy investment property and rent it out. Congratulations, you are on your way to become a landlord!
However, before you jump in - here is a quick checklist.
1. Has your Realtor given you an assessment of current rents and home values in your neighborhood?
2. Will the rent cover your mortgage + renters insurance + real estate taxes + cost of finding a tenant?
3. Are you allowing for a small buffer for the times when you property may be vacant between tenants? Also general updating - painting, maid service, carpet cleaning, minor repairs between tenants.
4. Will you be hiring a management company? Management companies typically charge 8-10% based on services provided.
5. If not - will you be living locally or do you have friends and family who can pitch in times of need? Connecting with handymen, checking basement for water during storms, even running a spare key to the tenant in need...?
6. Will you accept tenants with pets?
7. Do you understand the tax implications of becoming a landlord?
8. Do you have the down payment for your new home?
9. Will you qualify for the mortgage on your new home? Total debt to income ratio is key in mortgage approvals.
10. Above all - are you ok letting strangers into your space? No tenant will maintain your home the way you would.
If this checklist does not faze you - you are the perfect candidate for becoming an "Landlord". Ofcourse - the real estate market does not swing back and forth easily - so all decisions you make must be relatively long term ones.
Remember it starts with understanding the current market value of your home, and the going rent in your neighborhood. Call or write to Bela Vora today and get a free consultation and analysis for your home. Lets have the rent vs sell discussion soon.
Other articles with real estate tips
Title: "Rent vs. Own: A Real Estate Reality Check for Navigating Booms, Busts and Bad Advice"
ReplyDeleteAuthor: Jane Hodges
Publisher: Chronicle Books, 2012; 272 pages; $18.95