You might have one of any number of reasons to turn your home into a rental. Perhaps you all of your children are grown and they’ve moved out of the house and into their own homes. Or maybe you have moved to a new area and are having a tough time selling your old house. Whatever your reason, renting rooms or even the entire house is a viable option. There are both pros and cons you need to weigh before making a final decision.
There is of course getting extra income from renting your home. Depending on how much you charge, you can recover all or at least a major part of your mortgage costs. If you are charging enough, you can actually make headway on your loan.
You might be eligible for tax benefits, too, especially if you are renting part of your primary home. The interest on the mortgage is tax deductible so you are gaining income and keeping the deduction. Plus, if you have a separate home that you rent, you might be able to deduct more off your taxes. This includes the costs of repairs and things like water used as irrigation and building depreciation.
If your area is starting to rebound from the recession, you can use the time you rent the house to allow the home’s value to increase. This is great if you ended up upside down on your mortgage and you don’t want to lose money.
There might be some repairs you need to have done, and if you find the right tenant, he or she can do the work for you. In exchange, offer to reduce the rent for the work that gets done. It’s a win-win for the both of you.
If you are looking to eventually sell the property, you can think about a rent to own contract. Check with a real estate attorney to help you draw up the contract. If it’s successful, the ownership transition is much smoother.
If you own a separate rental home, you have to pay its mortgage even when no one is living there. This can be a financial stress if you don’t have the money to cover the costs.
There are also the stresses that come with being a landlord, including tenant disputes and unit maintenance. There are a lot of laws and regulations you have to comply with as a landlord. Ignorance of the law is not a reason in the courts’ eyes to get out of a complaint or lawsuit. This is why many homeowners turn to property management companies to help. They take as much as 10% of each month’s rent in costs, but they will keep up on the legal obligations.
You may have costs associated with your rental like repairs, advertising, HOA dues, or property management fees. If you choose to do credit checks or background checks on your tenants, you’ll have to pay for those, too. These can eat into rental profits quickly.
There is some stress involved – will the tenant pay on time and will they be good to the property? You will also not be able to sell the house during the rental contract period, so you have to be able to keep the house. The exception would be if you sell to someone willing to allow your renter to stay.
Take a look at your situation and evaluate your own personal pros and cons. Whatever you decide to do, you’ll know you did so after much careful thought and consideration.
If you looking for a jobs in Boston that has the potential to make over 150k+ your 1st year. And you have your mass real estate license then please contact us at Tazar. Also if you need the best Boston plumbing service at a fair value please contact Boston Plumber. http://www.bestvalueplumbing.com/Share on Facebook