The normal thing most homeowners do when they leave is to sell. However, rents are rising faster than house prices in areas that have remained almost unfettered. When we're in a buyer's market and you don't want to get the same amount out of your home, renting a place instead of selling might be a better idea.
Thinking of renting?
In areas of the country where home prices have not increased in value, it might be wise to rent out your home for a few years before selling to increase the value of the property. There are many real estate investors who buy multiple homes in the same area with the intention of renting them out for a few years and then selling when prices rise. Plus, depending on your costs, you may even be able to make a profit on the rent each month someone is there.
Even if a rental home is not profitable, it may still be the best financial option for their situation. If for whatever reason you are moving and unable to sell your home before you leave, you may want to rent it out instead of trying to sell it and paying two mortgages. In that case, someone may decide to rent it out to offset some of the loss you would normally incur if you were unable to sell it. By doing it this way, you will be able to adjust the finances to allow them to put their home on the market because they are able to find home buyers in a better market.
Considerations before renting
If you can afford to have a home on the market for several months, then choosing a rental may require a little more research. As I said before, renting isn't always profitable, so you need to be sure to do your research before renting in hopes of making money.
Are you ready to become a landlord?
First, even though you may only have one home that you rent out, rather than the dozens that a full-time investor might have, you must consider yourself a landlord with all the duties and responsibilities of one.
Consider this: what do you do when your tenants tell you they can't pay their rent this month? Unless you unwittingly find tenants who sign a lease with no intention of paying rent, most tenants want to remain solvent and only say they can't pay when money becomes a problem, such as during the holidays or the start of the school term. Do you have a procedure in place to resolve the issue in such cases? Do you mean eviction lawyers if things get worse? As the landlord, you are also responsible for all repairs. Do you have a list of repairmen handy in case of an emergency? For these reasons, many people find it easier to rent their homes using property management companies that do the screening and communication with tenants themselves. However, companies also expect an 8-10% cut in rent for their work.
Will the rental be profitable?
Use local listings to determine the likely rental price and compare rental costs such as taxes, insurance, maintenance costs and management fees. Don't forget to factor in the vacancy period, which varies widely, so ask the broker or firm. After accounting for all these expenses, if you have a profit of more than a hundred dollars a month, it is a reasonable amount that may be worth your trouble.
If you realize that you hate the idea of being a landlord or that the expected profit is too small, you may be better off selling your property rent-free