With Mobile Eastern Shore AL real estate sales slowing a bit for the summer, many sellers are left wondering if they may be better off renting their home out for the time being until market activity picks back up. If you have already purchased another home, this option is especially attractive as it allows you to cut down on the expense of paying two mortgages while you wait for your home to sell.
Below are some items to think about, courtesy of BankRate.com, before deciding to become a landlord:
- Mortgage payments must be made regardless of if the property is inhabited.
- Costly repairs and maintenance work cannot be delayed if they inconvenience the tenant.
- Disputes with tenants could require legal representation and legal fees.
- There are many costs involved in renting a home – it is recommended that landlords budget 25-30% of the rent to be used for maintenance, repairs, or emergency. This should be a key factor when deciding how much rent to charge in order to break even.
In addition to extra tax advantages (on top of the regular deductions of mortgage interest and taxes), renting out your property might also allow you to continue to build equity in your old home at the expense of the renter. You might even be able to make a profit from the rent, if your expenses are low enough!