Many people rent out their homes or other properties to generate some income. Rental properties could also be an excellent way for you to earn some extra cash, even if rentals aren’t your primary business or source of income.
If you are considering renting out your home, or even part of your home, there are some elements to think about. Renting out an entire property comes with different benefits and risks than renting out part of your house. But, overall, you should determine if sharing your home with renters is right for you.
While the rental business can be a wise move, there are pros and cons. Here’s what to take into consideration.
Research rentals in your area.
If you’re considering renting out your home as you are relocating or wanting to upgrade to a new place, you’ll want to look into the rental market in your city. If there aren’t many people wanting to rent in your area, it doesn’t make much sense to try and list your property. Here are a few questions to consider when trying to determine if you should sell or rent your home:
- Do you want to handle the responsibilities that come with being a landlord?
- Is your home appealing to renters with desirable amenities?
- Would it be possible to make a profit?
- Is demand weak?
- Do you want to have the possibility to use the house in the future?
These are all inquiries to ask yourself and mull over. Renting a property means work on your end, so you’ll want to make sure it makes sense for you financially and emotionally.
2. Think about how much of the work you want to do yourself.
Many people who rent live out of the city or even the state of their rental property. So, if you are going to relocate and won’t be close by, you’ll want to work with a property management company that can help you find renters and maintain the property.
Even if you live nearby, working with property management companies can take a lot of the responsibility and work off your plate. You just have to determine if you’d rather do that work yourself or pay someone else do it. It really depends on your lifestyle.
3. Remember hidden costs like insurance and repairs.
Even with respectful, clean renters, wear and tear will happens over time. You’ll have to think about the costs of upgrading or repairing issues to the house. These kinds of issues will happen somewhat frequently and even more so if the property is older. As a landlord, it will still be your responsibility to maintain the property to some degree, so these are other factors to consider when weighing costs versus income.
You’ll also want to consider insurance that will protect the property from rental damage.
4. Evaluate renting on a room or house-share site.
There are multiple companies, such as Airbnb, that allow you to use them as a quick way to rent out your home or even rooms in your home. While these companies are the easiest and quickest to use, they do have downsides.
For one thing, you may not legally be able to rent out your home this way, depending on where you live. For another, renting out part of your home is riskier as you’ll deal with a lot more renters and could even encounter people who pose risks to your property and yourself.
Conclusion: Weigh The Pros And Cons
Many Americans have success renting out their home or other properties they own. This list is a starting point to help you ask questions and evaluate whether renting out your house is right for you. Overall, you’ll want to carefully consider the financial elements and how much work you feel you can put into being a landlord. And, if it does seem like the right path, you should pursue it, as there are many potential benefits.