Jul 12, 2013

Should you lease out your home?

Homeowners are sometimes torn between selling and leasing their property. While everyones circumstances can vary, often the same factors should be considered when deciding if you should rent your home. Usually the primary reason for leasing your existing property is because you hope to get a higher price if you sell later.
Before you decide to become a landlord, consider:
  1. Your home's condition. Can you lease it in 'as is' condition? How old are some of the system like the air conditioner or water heater? Factor in a cushion of about 10% of the rent for possible repairs while it is leased. However, before making expensive upgrades to the property in order to lease, consider the wear and tear from tenants ( and their possible pets). Make sure you add in the cost for repairs when they vacate in addition to a hefty deposit.
  2. What is your carrying cost? Compare the total of your mortgage payments, insurance, property taxes, HOA dues and any other expenses to the rental income. If you have a pool and nice garden, you may want to keep your current service people and add that in to the rent. If you use a property manager, they will likely charge about 10% of the monthly rent for their services. A realtor may charge the equivalent of 1 month's rent to find and screen your tenant, lease the property and handle the paperwork.
  3. Research the local market. Talk to a realtor and find out how leasable your property is. How much can you expect to charge? In North Dallas, single family homes typically lease between $1 and $1.50 a square foot.
  4. How picky will you be about your tenant? Your tenant can have a big impact on your peace of mind and your wallet. Screen any potential tenant with a credit report and background check. But even that won't tell you how they will treat your home. It's a hassle and can be expensive to evict tenants. You want someone you feel comfortable with.
When you're ready to buy or sell, I'm happy to assist you. [where: 75230]

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