Renting Out Your Upgraded Home, Worth it?
Hello everyone! I've been lurking on BP for a while now and reading the site without a username for even longer. I'm still doing research and learning before jumping into RE investing so no experience to speak of besides what I've done with buying and selling (with an agent) my own homes. I have no experience being either a landlord or a tenant so please excuse my ignorance if some of these things are common knowledge in your circles. I've finally decided to make my first post hoping to get some advice on a topic thats really been bothering me. You can skip to the final paragraph if you don't want the backstory.
I live in a single-family home in a community where rentals are capped at 7% of total homes with an HoA fee of 700/year, no CDD. Rentals here must adhere to strict guidelines - professional landscaping, pest control, all of the other HoA fees. So its not a place for sloppy renters and theres a lot of overhead that has to be paid. When I moved in this house had been a rental that the owner overpaid for and was dumping after his tenant passed on - sheet vinyl flooring, fake wood cabinets and Formica countertops, builder-grade everything. I ripped all of that out and replaced it with nice 24" square tile, Kraftmaid cabinets, Granite countertops, new carpet in bedrooms, remodeled the bathrooms, repainted everything, upgraded baseboards, new appliances and fixtures, etc. The works. The upgrades paid off as I was able to refi and drop my PMI right at the 2-year mark and save myself a chunk of payment and the house has appreciated a bit. I don't regret sinking the money into the house at all but I'm sure we'll be making a move in the next 1-2 years as we start our family into something bigger with a better yard, pool, and all of the other money pits that come with family living.
Fast forward to today. Home values are absolutely out of this world in Tampa though they appear to have leveled off lately and may even be starting to drop in some areas. I'm seeing more and more for-sale signs up in my neighborhood for longer and longer. It seems like now may be the last chance to sell for top(ish) dollar. But if I do that I have to buy another house at these prices which I have no interest in doing. Which leads me to the inevitable - I'll have to stay here until its a bit more of a buyer's market, then move into a new house and either sell this at the lower prices or rent it until the next market cycle.
I'd prefer to rent it out.
However, I worry that this house simply won't make a good rental with the types of furnishings I've put into it. I've always figured it was a given that renters are harder on a house than owners and you furnish rentals with builder-grade items designed for durability, am I wrong? Should I worry about the increased potential for these non 'renter-friendly' types of things to get damaged and cost more to replace than builder-grade stuff? I know theres a rent amount at which anything becomes worthwhile but I'm not sure whether renters are going to pay more with the furnishings in mind to hit that amount. I did read the stickied post in this forum which talks about your home's condition prior to renting, though that seemed more focused on how many renovations to make, not what to do if you've already completely renovated your home to be comfortable in it. Does anybody have any experience here? Am I just worrying about nothing? I appreciate any thoughts or criticism.