For some homeowners, the idea of renting out their houses is an easy decision. They think of all the benefits they can have, like the extra income or not losing money on an empty property. However, for other rental property owners, the decision may not be that easy. They may worry about what will happen to the property, if it will be properly taken care of, and if they can trust who they’re renting out to.
If you experience these feelings as a rental property owner, continue reading to find out some of the pros and cons of renting out your house.
Benefits of Renting Out Your House
Added Income From Tenants
Renting out your home can provide you with extra cash flow that will certainly come in handy. Whether you’re renting the full property, or house hacking, your renters can help in assisting you to pay down your mortgage. This is especially applicable in areas where rent has increased over the past years. For example, imagine you purchased a house in 2005, and now the cost of rent has gone up but the mortgage remains the same. If you’ve priced your rental property correctly, you can cover the cost of your mortgage and have a bit of extra cash at the same time. Even if your property is not rented out year-round, that still provides you with a nice sum of extra cash.
Property Value Increases Over Time
On a long-term basis, the value of most properties will typically appreciate over time. Of course, this depends on the specific market of your house. However, even if the housing market appears to take a dip, it will generally climb back up.
Cons of Renting Out Your House
Being a Landlord
Becoming a landlord isn’t for everyone. It’s quite a large responsibility that you should be ready and willing to take on. It takes up time and money, even if you’ve managed to rent out the property.
Even if you know your home fairly well, problems can arise that you would never have anticipated. You may receive calls in the middle of the night from tenants asking for assistance if something has gone wrong in the house. Not to mention that once you become a landlord, additional insurance is needed for your property.
When preparing for your property tour, efficiency is key. Small mishaps throughout the day may ruin chances with a prospective renter.
A good real estate agent should be knowledgeable about the surrounding area and what it has to offer prospective tenants. Or better yet, find out what aspects of a neighborhood are important to them beforehand and include that on the tour.
Be sure to have contact information for the landlord or their representative. If there is sincere interest, they’ll need this information once they sign the lease.
Every landlord’s worst nightmare is to deal with tenants that fail to live up to their promises. Although sometimes you may land a tenant that always pays their rent on time, you may also have tenants that pay late every month. Or worse, they may fail to pay at all. You’ll have to spend countless hours chasing them down for rent or may even be forced to attempt eviction.
Along with this, some tenants fail to give the property the respect it deserves. They may cause even more wear and tear than their security deposit can cover.
Renting Your House - The Choice is Yours
At the end of the day, only you can decide whether or not you will rent out your home. While many homeowners at first were quite nervous about taking the leap, they’ve found that it wasn’t nearly as daunting as they expected. Many have gone on to have wonderful tenants that turned into long-term renters and a reliable source of extra income.
Have you personally rented out your home before? If you have, what pitfalls do you think aspiring landlords should avoid?
Let us know in the comments!
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