Your mind is made up and you have decided that you are relocating. Now while a number of people right away think of renting the home to get a steady cash flow, you might be one of those that would rather sell your home.
This decision is not easy for everyone, so here are a few guiding questions to help you determine whether renting out your home is really all it is cracked out to be.
Can you afford to rent it out?
You will obviously have to sink a load of money in purchasing your new home so if you do not have enough liquidity to pay for down payments, closing costs and those other miscellaneous costs that come with buying a new home, selling your current home would be the ideal choice for you as it would inject that much needed dose of funds into your hunt for a new home rather than leaving it tied up in a home for rent.
Can you handle being a landlord?
The idea of being a landlord may seem very attractive at first thought but it is far from the rosy picture we often imagine of just leaning back in a couch and receiving a stream of cash in form of monthly rent from your tenants.
Being a landlord comes with the stress of screening potential tenants, handling tenants’ complaints and settling their disputes. You also have to have the mental fortitude to kick them out when they fail to pay the rent or break the rules, unless you’re ready to shoulder losses.
You also have to take the legal responsibilities that come with being a landlord into consideration. The laws governing the landlord-tenant relationship vary from state to state and you should therefore make yourself conversant with the ones in your area as well as the necessary paperwork.
Will you manage to break even?
Will the monthly income in form of rent from the tenants be enough to cover all the expenses like monthly mortgage payments, homeowners insurance as well as repairs and maintenance, and still leave you with a handsome profit? If not, then you should sell.
You should be able to obtain a positive cash flow if you are to rent your home out. The whole point of putting the property to rent is to make money and not dig you further into debt.
You will therefore need to take into consideration the state of the rental market in your neighborhood; this will help you know how much you can charge for rent and from there, you can calculate and determine whether or not you can achieve a positive cash flow.
Make it a point to specifically look at your neighborhood not just the whole state at large as the rental market may be doing generally well in your state but it has not yet picked up momentum in your particular neighborhood.
If you find that renting will not make you the money you thought it would, selling is the only viable option left. Get in touch with the folks at Local Motive Properties since they offer you cash straight up for your property.