3 Considerations Before Renting Your Home

Sudden life changes, the purchase of a new home, a job relocation, and other life events can make renting your home an option. Before you decide to rent your primary home, consider several things first.

1. Expenses: Besides your existing mortgage payment there are other expenses to consider, such as advertising and rental listing fees, property management fees, and ongoing maintenance. If you want a property manager to take care of all of the hassles, get ready to take 30% right off the top of your rents. Also, make sure you have enough money set aside to cover any unforeseen repairs or maintenance-related issues. If you have another home, now you will have 2 homes to maintain.
2. Damage to your home: Renters don't respect your home as much as you do, and will cause damages. Those new wood floors you installed last year will likely be destroyed after a year of renting. Carpet is also a common item that will need replacing after renting your home.
3. Vacancies or No Pay Renters: Factor a 20% vacancy rate into your numbers when calculating your rental revenues. Also, you may sign a lease with a renter that is a slow payer, or even a no payer. Depending on the eviction laws in your State, it could be hard to get a deadbeat renter out, and it may cost you money in both lost rents and legal fees.

There are other pros and cons of becoming a landlord. Before you decide to rent your home, consider all of the factors involved, and not just the 3 considerations listed above. Renting your primary home is not an easy task, and is a big commitment of time and energy, so make sure you have considered everything before you do.