Rent Your Home Instead of Selling It

If you need to move but are loathe to sell in this economy, you might want to rent your home while you wait for the market to recover. In many places the price of rent has not experienced the same downturn that mortgage prices have, and may exceed the cost of your current payments. If you’re considering renting your house, here are some things to think about.

What Are The Costs of Renting?

Consider the mortgage, taxes and insurance, all your current costs. Remember that your insurance costs will rise when you are no longer living in the house. Consider what, if any, maintenance will be required both before your tenants move in as well as on an ongoing basis. Research what the going rental rates are in your area. Will it cover most or all of the above costs?

Tax Benefits

There are quite a few tax benefits to becoming a landlord. You can deduct the cost of the depreciation of the structure, as well as all the repairs, maintenance, mortgage and insurance You will, however, pay capital gains tax on any increase in the value of your home (less depreciation), but renting for a few years while the market rebounds may be preferable to taking a loss now. But you should talk to a tax specialist about the specifics of your situation, and how to optimize this strategy.

Do You Have What It Takes To Be A Good Landlord?

The final thing to think about is whether you have what it takes to be a good landlord. Are you going to be in the area to fix toilets and collect rents? Even if you are, do you want to? Do you understand rental laws so you don’t run afoul of the Fair Housing Act? Do you know the procedure for evictions and non-payment? If all this makes your head hurt, consider hiring a reputable property management firm to handle all that for you. The modest fee more than pays for itself in peace of mind. If you are thinking of renting out your property, give us a call to discuss your options:(703) 424-7767