4 Risks to Renting Out a House
If you own a home that you’re not currently living in, what better way to make a residual income than renting the place out? It seems like a no-brainer, but there are several risks associated with renting out a piece of your property to other people. Consider them carefully before making your final decision.
Can’t Find Renters?
Depending on the housing market, the location of the home, and many other factors, you might not be able to find renters right away. If you’ve not yet bought a rental property, keep these factors in mind during your search. Location is very important when considering a rental property, and you may very well have to adjust the rent that you expect if it doesn’t fit the location’s income ratio. Even if you’ve done all that you need to do, there may still be a chance that renters will not be easy to come by.
Found Renters, but They’re Awful?
So, you’ve found yourself some renters, but there’s a chance that you’ll wish you hadn’t. While you might find perfectly lovely people to rent your home, you might find the worst of the worst in the rental world. They might be constantly late on rent, might trash your home, ignore the pet and smoking policies, and have parties that often involve the police being called. There is always the possibility that your renters are going to end up costing you more than you’ll ever make from your arrangement.
The renters might not be the problem with the rental home. There is always a possibility of something going wrong or breaking. As a landlord, you’re responsible for repairs. If a pipe bursts, the furnace breaks, or there’s a fire that doesn’t destroy the entire home, repairs are likely to become very costly. If you don’t have money saved, or insurance doesn’t cover any of the damages to your rental home, coming up with the funds to make the home livable is going to add a lot of stress to your life.
Aiming Too High
You might have a rental price range in mind that covers any of the expenses that you might need involving the rental home. It’s always a good idea to plan these price ranges ahead of time. There’s a chance that you might be aiming too high, and no potential renters in the area will be able to afford the price that you want for the home. There’ no real point in having a rental home if you can’t attract any renters to it.
Be very careful when you plan to rent out your house. When everything works out, it can be rewarding, but any major problem can set you back. Have a plan for each issue you might come across before you agree to let someone live in a place that belongs to you.
Let my team at Keystone Realtors meet all your real estate needs. I have over 14 years of experience in buying and selling in the Santa Clara and San Mateo County areas, specializing in the high-end, luxury market. Visit our website at http://www.paulphangureh.com/ for listings and information. You can contact me at 650-924-2544, or emailat email@example.com.