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Should I Rent My House If I Can’t Sell It?

There has been a lot written about how buying a home is less expensive than renting one in many parts of the country. Rents are skyrocketing and homes are at bargain prices. These two situations are also causing some sellers to consider renting their home instead of selling it. After all, they can get great rental income now and perhaps wait until house values increase in the future before selling.

This logic makes sense in some cases. We at KCM believe strongly that residential real estate is a great investment right now. However, there is a huge difference between deciding you want to become an investor (and landlord) and deciding that renting your primary residence might be ‘easier’ than trying to sell it. As a real estate professional, it is your job to educate the homeowner to the possible challenges that might arise if they rent their home.

Here are some questions every potential landlord should consider:

10 Questions to Ask BEFORE Renting Your Home

1.) How will you respond if your tenant says they can’t afford to pay the rent this month because of more pressing obligations? (This happens most often during holiday season and back-to-school time when families with children have extra expenses).

2.) Because of the economy, over ten percent of homeowners can no longer make their mortgage payment. What percent of tenants do you think can no longer afford to pay their rent?

3.) Have you interviewed a few experienced eviction attorneys in case a challenge does arise?

4.) Have you talked to your insurance company about a possible increase in premiums as liability is greater in a non-owner occupied home?

5.) Will you allow pets? Cats? Dogs? How big a dog?

6.) How will you actually collect the rent? By mail? In person?

7.) Repairs are part of being a landlord. Who will take tenant calls when necessary repairs arise?

8.) Do you have a list of craftspeople readily available to handle these repairs?

9.) How often will you do a physical inspection of the property?

10.) Will you alert your current neighbors that you are renting the house?

 

10 replies
  1. Chris
    Chris says:

    As a former landlord of what was my primary residence, I would say this is right on. Just sell it and take your hit if you can. What this doesn’t mention is the emotional stress being a landlord puts on you. Unless it is paid for and you have a large emergency/housing repair fund, you will always be worried about the next payment, if the furnace will go out on a Sunday in the winter, etc. margins aren’t normally good enough to bring this kind of stress into your life.

    Reply
  2. GK
    GK says:

    All those that are not supporting the rental option are chickens or those who have something to benefit from a sale (i.e., you are a real estate agent). being a landlord is not that stressful if you can train your mind to think financially rather than using your emotions. Hire a professional to manage your tenant and cut any contact with your tenant. Make sure that your property manager uses a comprehensive lease. Purchase an umbrella policy and make sure that you have enough additional liability coverages. Hire an accountant who knows how to take advantage of all tax laws that are in favor of landlords (I am not asking you to cheat – but use the laws to your advantage). Site back and relax until the market bounces back. Don’t listen to all these wimpy talk. Go for it.

    Reply
    • KCMcrew
      KCMcrew says:

      @752f4b76ae4b07156a4df5f34beda119:disqus, we can assure you that none of the members of The KCM Crew benefit directly from an agent listing or selling houses. In fact, only one of us has a real estate license and that particular crew member has not been practicing for over 15 years.

      We’re not saying that renting your home isn’t a good option, we’re just saying
      that it may not be for everyone.

      Reply
  3. Janet
    Janet says:

    As both an agent and a landlord I would say to ensure that you have reserves for those unexpected repairs and unplanned vacancies.. It can be a financial suicide to the owners financial well being if unprepared. I would also say treat the tenants with respect, and they will more than likely treat you and your property the same.

    Reply

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