SHOULD I RENT MY HOUSE INSTEAD OF SELLING IT?

A study has concluded that 39% of buyers prefer to rent out their last residence rather than
sell it when purchasing their next home.
The study cites that many homeowners were able to refinance and “locked in a very low
mortgage rate in recent years. That low rate, combined with a strong rental market, means they
can charge more in rent than they pay in mortgage each month... so they are going for it.”
This logic makes sense in some cases. Residential real estate is a great investment right now.
However, if you have no desire to actually become an educated investor in this sector, you
may be headed for more trouble than you were looking for. Are you ready to be a landlord?
Before renting your home, you should answer the following questions to make sure this is
the right course of action for you and your family.

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. What percentage of tenants do you think cannot afford to pay their rent?
3. Have you interviewed 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? Direct Deposit?
7. Repairs are part of being a landlord. Who will take tenant calls when necessary repairs
come up?
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?
Bottom Line
Again, renting out residential real estate historically is a great investment. However, it is not
without its challenges. Make sure you have decided to rent the house because you want to
be an investor, not because you are hoping to get a few extra dollars by postponing a sale.