Are you asking yourself, “Should I rent or sell my home?” In this market, there is no incorrect answer. Inventory is low and prices are up for both sales and leasing. So, as a seller or landlord, you simply can’t go wrong.
Here are four important questions to ask yourself before leasing a residential home or condominium.
Determine your price point, which can be as high as 20% over market value right now. Let’s say you lease you home or condo for $10,000 a month. Calculate your expenses:
If the net profit after expenses works for you, then you have your answer.
It’s a well known fact that tenants do not take the same level of care of a rental home as an owner. That being said, much depends on choosing the right tenant and not basing your tenant selection solely on rent price. Definitely screen a tenant for income, credit and criminal background. Call their previous landlord to inquire about them. Consider purchasing a home warranty plan and collecting two months security and pet deposits.
If you don’t want to hire a property manager, you must assume the job of dealing with tenants. Setting the tone for an excellent landlord-tenant relationship is critical. It’s best to set boundaries in the lease by establishing responsibilities for everything. Leave nothing to chance or assumption. And try to be fair, reasonable and responsive to the tenant.
Obtain financial advice from an accountant and legal advice from an attorney about potential liability and how to best protect your assets. Rental properties are frequently placed in an LLC.