What you need to know before converting your property into a rental.
Have you ever thought about renting out your property? Maybe you want to travel the world and plan on using this as an extra source of income when you’re away. Whatever your situation is, there are a few things you should know before you decide to rent out your property instead of selling it.
First, find out whether or not your property would earn you money. Cash flow is extremely important, so don’t rent out your property if your mortgage payment is $2,000 a month and you would only get $1,500, for example. Calculate this ahead of time.
“Be prepared before you decide to turn your property into a rental.”
Secondly, there are a few things you’ll need to decide beforehand. One of those is how you will do background checks, as those are very important when choosing a tenant. Also, will you be able to manage the property yourself, or are you going to hire a property manager? In addition, make sure to check with your HOA to see if renting out your property is against the rules.
Overall, you need to be prepared for extra costs, whether that be because of property taxes or needing to fix things from tenant wear-and-tear. One thing that many people don’t realize is if you turn your primary residence into an investment property, you’re going to lose a lot of tax advantages when you decide to sell. Therefore, go over this with your CPA before you make any decisions.
Know that we have investment properties and can answer questions you have about yours. We’ve helped a lot of clients with this issue and we can help you too! Call or email us anytime and we would be happy to hear from you. We want to help you make the best decision for you.