Renting out a home can be very enticing, especially if your house has been on the market for a while with no sign of finding a buyer, or if you’re looking for extra income during your retirement years. The prospect of making a few hundred dollars each month might be the financial safety net you’re looking for, but there are extra steps to take to research the pros and cons of owning rental property before making such an important decision.
The Pros of Owning Rental Property
At first glance, there are many positive things about owning rental property. Having a passive income stream helps pay off your mortgage on your rental property and the home you live in more rapidly. There are also tax advantages to renting out properties, such as claiming all of the mortgage interest you pay against the income you earn from your rental property. Property values appreciate over time. The longer you rent out a property, the more flexibility you have once you retire.
The Downsides to Being a Landlord
Renting a property is a great way to supplement income, but it has challenges as well. Rental properties are riskier to purchase in the eyes of banks and often require a larger down payment. You can also anticipate the bank will charge a higher interest rate for rental property than the home you live in. You need to make sure you thoroughly research loans as well as the average cost of rent in the area. It’s a good idea to work with a property manager to help you accurately estimate monthly costs for maintenance fees, insurance, and taxes in addition to rent.
Finding the perfect tenant is also difficult if you have a property that’s for rent at the wrong time of year. You don’t want to be stuck with the hassle of trying to evict a tenant who won’t pay rent. Empty units can cause financial stress if you haven’t planned properly or there are repairs that require the unit to remain uninhabited for longer than you prefer.
Landlords are also required to maintain their rental properties. These costs can add up if they aren’t spread out. If you choose to manage the property yourself you should also be prepared to answer emergency phone calls for when that older HVAC system finally breaks.
Reduce the Stress of Renting Out Your Future Retirement Home
Hiring a property manager can save you a lot of headaches when surprises arise on your rental property. When you hire a property manager you will have the assurance that your retirement home is well maintained. Every time tenants move in and out a property manager will perform maintenance checks. They will also ensure tenants who live in your future home receive proper background checks before signing a lease. For more information about the role of a property manager contact All Brevard Property Management in Indialantic, FL.