With interest rates still low and prices starting to rise again, some homeowners are deciding to buy now—but not sell their current homes. Rental rates are sky-high and these savvy homeowners are looking to rent out their current homes in order to cover their new mortgage and make a profit on the side.
If this is something that you’ve considered, you’ll need to think about the possible costs of renting and the amount of work involved being a landlord.
First and foremost, keep in mind that leasing your home can be expensive, so take a close look at the costs of renting out your home. Not only will you have to fix up your home before (and possibly after) renting it out, but you’ll have other costs such as regular maintenance and property management fees, if applicable. You’ll need to have good cash flow and plan for worst-case scenarios such as excess damage caused by tenants. Also, you’ll need to ask yourself this very important financial question: Will you be able to afford two mortgages if your rental is empty between tenants?
Being a landlord can be difficult, so the smart thing to do is to hire a property manager. A property manager is essential for several reasons. Not only will a management company oversee your property on a regular basis, but they can also handle any problems. Also, a property management company is well versed in the business side of renting, namely the intricacies of leases and other legal aspects. Finally, a good management company will have plenty of connections, not only to goods and services such as repair people, but also to potential renters.
Much like investing in a house in order to sell it for a profit, you’ll need to treat your rental home as a business. If you do, you’ll be much more likely to have a successful renting experience.
For more than 25 years, Omega Financial has been serving mortgage clients in Massachusetts. Our brokers have approximately 50 years in the mortgage business. You always will receive fast, courteous, and accurate information. Omega Financial, Inc. is a company duly licensed to operate in Massachusetts as a Mortgage Brokerage. We are located in the Town of Norwood, Massachusetts where we have been operating as Omega Financial Incorporated since 1988. Licensed by the Commissioner of Banks - License No. MB2671