A house is much more than just a house. It’s more than just 4 walls holding up a roof. It holds a piece of your heart, memories that last a lifetime, and stores moments in time that you never want to let go of, which can make it hard when it’s time to move on. But there’s good news! You don’t have to. Renting out your home is a great way to keep those memories and make some money - a true win-win situation! In this blog post, I am going to be discussing the pros and cons of renting a property, as opposed to selling it.
Pros
Passive Income
Everybody loves money! Especially when it doesn’t require you to clock in and out every day. Once a lease and reliable renters are in place, the money rolls in with minimal effort on your part, especially if you hire a property manager to handle the day-to-day questions and concerns from tenants.
Appreciation
You might have heard people say, “Prices aren’t what they used to be”. Well, when it comes to owning a home, this can work in your favor! Holding onto your property and renting it out can result in both a monthly income and a higher sale price, if you choose to sell later. You can wait for the perfect moment, when the market is in your favor, to sell your house!
Building Equity
If you still owe on your mortgage, renting is a great way to pay that down. Your tenants' rent can go directly to paying down your loan. Decreasing the amount you owe on your loan helps you to have more options, especially if you ever need to refinance.
Tax benefits
Owning a house costs money, but that’s not always a bad thing! If you own a property and are renting it out, you can include things like property management fees, maintenance and repairs, mortgage interest, property tax, depreciation, and operating expenses. Be sure to keep records of this when you prepare your tax returns.
Cons
Difficult Tenants
We’ve all heard the horror stories of crazy tenants who call every day about a new maintenance concern, or pay late every month. The fear of getting a bad tenant can be paralyzing when you want to rent out a home. Thorough tenant screening can help minimize this, and it’s recommended that you work with a professional property manager.
Potential Maintenance Required
Nobody wants to pay for a new fridge, after it stops working. Unfortunately, repairs are inevitable. Things don’t last forever. Eventually, you will have to replace broken down items in the house. Preventive maintenance, such as changing air filters, helps to minimize the costs of repairs. Always have a sufficient amount in savings to compensate for necessary maintenance and repairs.
Vacancy risks
Vacancy is bound to happen. It can take time to rent out a place, find good renters, and know the right price. Hiring a property manager can be helpful in this situation. They can run comparables in the area to figure out the right price, and they also have more access to websites that advertise to prospective renters.
Renting out your property can offer incredible benefits! You can make money and invest in your future. It can also be stressful, but you don’t have to do it alone. Hero Property Management is here to help. Reach out now to schedule a free consultation.