Moving can be an expensive process. You have to hire movers and possibly purchase storage. If you are moving across the country or across the world, the travel alone can cost thousands of dollars. Selling your old house can help you recoup some of these expenses. Yet perhaps you want to get a continuous flow of money into your bank account rather than just one or two checks from the buyers. You may want to consider getting a tenant for the property instead of putting it on the market. Here are some reasons to rent out your home.
1. You Can Learn About Real Estate and Business
Starting a rental property business is a great way to show off your entrepreneurial side. You do not even need a big office or tons of employees. You just need to keep track of finances and hire a property maintenance company to make sure your old house is functioning properly for your tenant. Renting out your home also teaches you a lot about the real estate business in general. You will have to study market trends, perfect your customer service skills and develop effective advertising strategies. Your experience may even encourage you to make renting homes your full-time career.
2. You Can Make Money
Even if you are not the entrepreneurial type, you will appreciate the increased cash flow that you get from your rental property. Just a few extra hundred dollars each month can go a long way toward paying your bills. Alternatively, you can save some of the money for a vacation or your children's college tuition. The extra money does not just come from your tenant's monthly checks, either. Renting out your home qualifies you for certain tax deductions every year. A tax professional can help you determine whether or not you get an increased refund.
3. Rental Demand Is Increasing
Ever since the Great Recession, more and more adults have chosen to rent rather than buy their homes. In fact, there were more than 108 million renters in America in 2018. It may thus be easier to find a tenant for your home than it would be to find a permanent buyer.
4. You Will Have a Backup Home
Unfortunately, not every personal or professional decision works out as planned. You may move out of your longtime home to take a new job or live closer to your lover. Yet, if the gig or the relationship fails, you may want to come back to your old property. Renting out rather than selling your prior house gives you this fallback option.
5. You Can Always Sell Your Home Later
The real estate market can fluctuate. Perhaps you are moving just as property values are declining. You may want to hold on to the home for now and then sell it later once it appreciates. Whatever your reason for renting out your home, there are some steps you should take before the tenants come. First, make sure the property is in relatively good shape. Have professionals clean the interior. You do not have to completely renovate the rooms, but you may want to get some new cabinet hardware or add some fresh paint. Mowing the lawn and planting some flowers should help the curb appeal, as well. Understanding local, state and federal laws is also an important part of being a landlord. Consider having an attorney help you draw up your lease and related documents. Make sure to also purchase adequate liability insurance. Of course, you will also have to update your property so it meets the relevant building and safety codes. If you are moving out of your old home but do not want to completely say good-bye to your old property, consider renting it to a tenant. This will help you earn some extra cash as you learn about the real estate industry. You can also move back into your former property or sell it later if necessary. This should give you an added piece of mind following your big move.