Many of my clients own properties – either their primary residence or a second home – that they are interested in renting out.
Sometimes that’s because they’re ready to purchase a new home, but the market isn’t where the client wants it to be.
Or they may be looking to rent out a second home until they’re ready to spend more time there!
Regardless, renting your home makes sense – sometimes, and if you do it wisely! You’ve all heard horror stories about tenants … and believe me, some pretty awful situations can arise if you don’t plan for the worst. Here are some questions to ask yourself before you become a landlord.
Is the local rental market soft as a down pillow … or hot as a frying pan?
Hot rental markets = high rental rates and low tenant turnover, ideal for landlords. Do you have a good idea of rents in your area?
Can you afford to hire a property manager? Rates vary, but property managers typically charge between seven and ten per cent of your monthly rent. Think that’s too high? Remember that property managers take an enormous burden off the shoulders of landlords and have expertise in areas you do not.
If you want to be a landlord but don’t want to pay a property manager, do you have an appetite for problem calls at all hours of the day and night? And do you have access to a good network of tradespeople and repair people? You’re going to need them!
Is your home “tenant proof”?
Are the finishings durable and sturdy, or are they delicate?
Do you have a top-of-the-line gourmet kitchen in an average-priced home? Or a spa-level bath in a starter condominium? The tenant who can afford the more basic amenities of your home may not have an appreciation for the high-ticket items you’ve invested in.
Unless you have a luxury home, if you’re renting out a home for an extended period, it may make sense to remove your expensive kitchen appliances and replace them with lower-end models.
Will you allow pets?
Estimates vary, but from 45% to 75% of American households own at least one pet.
Allow pets (with appropriate security deposits), and you vastly increase your pool of potential renters.
Do you have the stomach to evict someone, even if they tell you the worst hard luck story you’ve ever heard? Simply put: if you can’t evict a tenant, never become a landlord.
Hi! We’re Josh and Jolene Baijot, the creators of this website. We’re also commercial real estate brokers in Bellingham, Washington. Thank you for taking the time to read this blog post. We appreciate your time spent on this site. You can connect with us on Facebook, Instagram, or contact us through this website.
https://www.joshandjolene.com/why-you-need-a-local-expert/
