The thought may have crossed your mind: what if you find the job of a lifetime in another state, or your company transferred you - should you sell or rent your home? There are quite a few factors to consider before making such an important decision.
Reasons to Keep Your Home
Think about some reasons for keeping ownership of your home. Do you like the home enough to hold on to it in case you ever move back? Do you want a tax break through property depreciation? Do you want to use the home as a retirement investment?
These are all good reasons for retaining your home ownership, but there are other factors to consider that could outweigh the benefits. For instance, are you ready to be a long-distance landlord - hiring someone to maintain and manage the property for you? There are also many other costs involved, such as advertising, turning costs (cleaning and painting between tenants), taxes, insurance, utilities when your property is between tenants, etc. In order to properly assess these costs, you may want to research the numbers in your market. Expenses can run 30 to 40 percent of income before the monthly mortgage cost.
The ABCs of Property Rental
If you do decide to rent out your home, wondering where to start? First, get the house in good shape so you can get the highest possible rent. This includes the interior and exterior patching and painting, carpet cleaning or replacement, fixing appliances and whatever else needs fixing.
Once that is done, set the proper rent. Location is king when setting prices. You can contact a property management company to research prices in the area, or you can ask a local Realtor for some advise. If you set your price too high, you will likely have a hard time finding a tenant.
Should You Hire a Property Management Company?
Hiring a property manager is not essential, but it can make your life a little easier, especially if you are moving out of the state. You should interview at least three companies, and be sure to ask about their experience, references, tenant screening, maintenance, eviction handling, insurance, and any special services they offer.