Should I Sell My Home Or Rent It Out?

should i rent out or sell my san diego propertyA recent study has concluded that nearly half of home buyers (when purchasing their next home) would prefer to rent out their last residence, rather than sell it. The main reason? They have locked in a low mortgage rate, meaning they are able to charge more rent than they pay in their monthly mortgage payment. Of course, a strong rental market just makes it even better. So, should you rent out your home?

This logic makes sense in some cases. Residential real estate is a great investment right now and can be great long-term as well. But if you have no desire to actually become a landlord, you may be headed for more headaches than you think. Are you ready to be a landlord?

Myths of owning rental property

Before renting your home, ask yourself the following questions to make sure this is the right course of action:

10 Questions to ask BEFORE renting your home

  1. How will you react to a tenant that tells you they are unable to pay the rent this month?
  2. There are times when many homeowners cannot make their mortgage payment. What percentage of tenants do you think cannot afford to pay their rent?
  3. Do you know any experienced eviction attorneys in case a challenge does arise?
  4. Have you talked to your insurance company about a possible increase in premiums as liability is greater in a non-owner occupied home?
  5. Will you allow pets? Cats? Dogs? How big a dog?
  6. How will you actually collect the rent? By mail? In person?
  7. Repairs are part of being a landlord. Who will take tenant calls when necessary repairs come up? Will you hire a property management company?
  8. Do you have a list of craftspeople readily available to handle these repairs?
  9. How often will you do a physical inspection of the property?
  10. Will you alert your current neighbors that you are renting the house?

If the about seems like too much work, there is another option: let a property management company do all the heavy lifting. For around 8-10% of your total monthly rental income, they will ensure the property is occupied by the best tenants possible. This includes pre-screening tenants, showing the property, doing cleaning, repairs, & maintenance, and collecting rents. Most property management companies will charge an extra fee for finding new tenants, but that is worth it to some owners.

Bottom Line

Historically, renting out residential real estate. However, it is not without its many challenges. Make sure you have decided to rent the house because you want to be an investor, not because you are hoping to get a few extra dollars by postponing a sale.

 

Ryan Blanco-Realtor-San Diego Real Estate BlogAbout Me: I am a full time agent and I dedicate 100% of myself and my time to my valued clients in addition to the San Diego communities that I serve. It is imperative that I continuously evolve with local and national trends in addition to always looking ahead of the industry. It is a must to always provide the best service to my clients, their families and friends.

619.384.2248
Ryan@RyanYourRealtor.com

 

 

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3 Responses to “Should I Sell My Home Or Rent It Out?”

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