In today’s real estate market, many homeowners would like to trade-up, but are perplexed with regard to the decision of whether to sell or rent their present home when they purchase their new home. For the past several years, we have seen increasing rents, making the possibility of renting a home potentially a great financial decision.
If you can have someone make your mortgage payment for you, why not continue to build equity in two properties instead of one? In this article, we will look at the considerations which may determine whether it will be a good idea to convert your property into a rental. It is best to consider all of the issues in order to arrive at the best decision possible for your situation.
First, will you make a good landlord? When you rent your property, you now are a landlord. That means you are responsible for coordinating repairs, getting a lease signed and keeping your eye on the property. These tasks become even more difficult if you are moving out of town. If you decide that you would not make a good landlord, this does not mean that renting is not for you. You could list the rental with a real estate agent and hire a property manager. This will lower your cash flow. For many, avoiding becoming a day-to-day landlord is well worth the price.
What will the cash-flow be? If you are overburdened with debt, taking on a new larger mortgage and then facing a cash-flow loss on your present home can be very burdensome to your monthly finances. You need to be realistic in your expectations…
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