The following may not be what you want to hear but it is the TRUTH!
I get the following phone call about once a week.
"Hi, my name is ______ and my Realtor has been trying to sell my home for ___ months without success. He suggested that I rent it out until the market gets better. What do you think?
Now I am grateful when we get a referral because it usually means someone trusts you and I always take that very seriously.
The problem is that every person is not made to be a landlord. There are a couple of things that most people do not tell you up front that you need to be aware of before making this major decision.
This is what I usually tell people:
As you make the decision to become a landlord you have to cut all personal ties to the property. You can't think of the guest bedrooms as the place your kids grew up, or the kitchen as the two year remodel that came out perfect. If you happen to drive by or do an inspection and see that the occupants are not living in the home exactly how you did...you have to accept that (deep breath). DO NOT CONFUSE THIS WITH ACTUAL PHYSICAL PROPERTY DAMAGE. I am simply talking about messy rooms, dishes in the sink, or the overgrown grass in the backyard. Too often people get hung up on the fact that the home doesn’t look the same as they remember it. If you cannot take the emotional connections out of the equation then you should not be a landlord.
Make sure that you have AT LEAST 6 months of mortgage payments (if not more) in savings to cover any vacancies, repairs, etc. If you are counting on the rent check alone each month to cover the mortgage payment then you should not be a landlord.
Be prepared...renters may not pay and/or a major repair or damage could occur. Like any investment there will be ups and down. If every tenant stayed forever, paid top rent, and never need repairs, then everyone would be a landlord. The fact of the matter is that issues/hardships will come up and you need to be prepared to deal with them.
Now a lot of this is easier said then done, and I realize that a lot of people are being forced into being landlords. That is why it's important to hire a reputable property manager that with oversee your investment and collect the proper deposits to try and mitigate your damage should something go wrong.
If you or someone you know wants to discuss this further please contact me.
Realtor, Property Manager, New Blogger