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Should You Consider Renting vs Selling Your Home?

Are you thinking about renting your home instead of selling it?  Let me break down the pros/cons of renting your home.  I’ll also share some stories that I had from my experience of renting my personal home.

Let’s start with the advantages of renting your home vs selling

A key advantage to renting your home vs selling it is potential extra cash flow. Many people charge hundreds of dollars above their mortgage pay which gives them room to pay their mortgage, property manager and still put some cash in the pocket

Cash flow could increase over time: 

– Pay the principal balance down some and refinance, that could lead to even more $ in your pocket

– Depending on the structure of your lease, you can increase rent when possible

Demand is always sufficient 

 – Some people just don’t want to own a home as they believe it’s too expensive

– There will be families that will need to rent will they are saving to buy a home

Expenses can be tax deductible (I’m not a tax expert or advisor)

– Repair expenses that keep the property in a livable condition

– Traveling to check on your property

– Expense of hiring property manager 

– Mortgage interest 

– Depreciation

That sums up the advantages, let’s take a look at the disadvantages

The Potentially Bad Stuff 

Tenants can leave damage to your property

– Most landlords require a security deposit but if damages exceed the deposit amount, it can be costly to take the legal action required to force the tenant to pay

Bad property management 

– If you hire a property manager, do so after careful consideration

– Some questions to ask your property manager

What’s the tenant screening process?

How often do they physically check on the property?

How soon do you get paid after the tenant has paid their rent? 

Do they work with home warranty companies? 

How fast do they respond to tenant reported maintenance issues?

Is there a fund that is dedicated to maintenance expenses?

How often do they send a report that details the rents received, mx fee, their fees etc?

If you decide to rent your property, here’s some advice that I have 

1. As stated above, thoroughly interview the property manager!

2. Always have 2-3 months of mortgage saved in case the home is vacant for a while

3. Home warranty can be a life saver! Home warranties can range from $500-$600 and they can definitely be worth the investment.  I had a home in Sumter, SC that I rented for approximately 7 years.  Seemingly, every June, there was a problem with the AC!  My deductible was only $100 or so but the parts were sometimes as much as $3000 (including labor)!  If you decide to get a home warranty, do some research because there are some that are known to disappear when it’s time to file a claim.

Renting your home could be a great way to generate some extra income but as you saw in this video, it does come with some potential pitfalls.  If you decide to sell your home, check out the videos on the YouTube channel (link below).  It will give you tips on getting your home sold faster!

https://bit.ly/batonrougerealestateterrancejenkins

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