Whenever you decide you want to move into a bigger home, you have to decide what to do with your current home. For most people, selling is the only option in order to qualify to get a loan on a new home. But for a small percentage, the option to rent is always available. There are many reasons you may choose to rent, it could be because the market isn’t there to get the sales prices you want or you have a temporary job assignment for a few years. Whatever you reasons may be, here the pros and cons of renting your house:
- Keep property as it appreciates in value.
- You build equity and lower your mortgage balance at expense of renter.
- Tax-breaks could offset income tax on rent from various deductions and depreciation.
- Rental income covers mortgage, taxes, insurance, HOA and other expenses.
- Someone is there to maintain the home so it’s not vacant.
- Possible damage to the property if you get a bad tenant.
- Mortgage payments must be made even when the property is vacant.
- Could be taxed on the whole profit if you sell.
- Potential legal or financial problems with tenants.
Becoming a landlord isn’t for the faint of heart. What happens if a pipe breaks and you’re out of state on vacation? Being an absentee landlord is impossibly difficult unless you have someone to oversee the property. If you’re willing to part with a portion of the monthly rent, you could hire a property manager to oversee these things. A good property manager can take of everything related to the property from putting it on the market, screening your tenants, collecting rent, maintaining the property and even taking care of your mortgage or other payments.
So the real question is, ARE YOU CUT OUT TO BE A LANDLORD?
Whether you have a question about renting, selling or need advice on your property, call me today at 703-577-4320 for an expert consultation!