Renting Out Your Primary Residence
Have you been in the real estate market for quite a while trying to sell your primary residence? Is the market turning too cold than two or three months earlier when you first started listing your house? Now is the time to think about alternatives that would benefit both you and your expensive asset.
If you are experiencing financial impact from the house sitting in the market for longer than expected, think about renting it out – either full house or a portion. By doing so, you will become the beneficiary of all the advantages rental property owners can receive. However, finding someone who would rent the space, or the entire home needs to be done carefully. If you are renting out a small portion, like a bedroom or basement and don’t want to miss out on the rising rental market, careful screening of the tenants is a must. They are going to share the space with you.
Depending on the layout of the house, you and your tenant may be sharing a few rooms that were once used to be your private space. And truly, you will be losing many privacy aspects of living in your own house. What if you are renting the entire house? Then the matter of who will pay for what expenses related to the house will come up. Either way, you may want to check with state landlord and tenant act as well as rules set-forth by your homeowners association regarding what constitutes habitable space and how you can accommodate a tenant in your rental property.
When it comes to setting a rental price for a property, many new homeowners tend to stumble. It is even complex when only a part of the property is rented out. In the latter case, you may want to apply tighter screening criteria than other rental owners would. With only a portion of the house being rented, you may have more advantages than expected, you never know. The tenant may be someone you enjoy company with, or he or she may be the one you can entrust your house when you are away. And financial-wise, you are better off renting this way as you will be able to pass on some of the expenses related to the property, including property tax and HOA to the new tenant. Any maintenance and repair expenses, even if you are living in the house, can be considered as rental expenses as a result. Add to that the tax deductible, advertising costs, and other expenses that would incur in a landlord/tenant situation. You will be better off financially for the time period and until you decide to sell.
Perhaps you may want to have some flexibility in setting a rental price or stating rental terms. You can either choose a month-to-month agreement or lease depending on the demand and supply. With month-to-month terms, you have the leverage over price and ending the tenancy, whereas you cannot terminate a tenant on lease without valid reasons.