Are you ready to upgrade or downsize, but aren’t quite ready to sell your existing home? Converting your home to a rental property may make sense, under the right market conditions. To minimize the cost of carrying and maintaining the property, you may want to do the following:
Select durable materials
As you repair or improve parts of your home, select durable materials. Tenants can put a lot of wear and tear on your home. Durable materials will last longer and require replacement less often. For instance, linoleum floor can easily get damaged, whereas tile is more durable and resistant. Laminate flooring may hold up better than carpeting. Furthermore, if a section gets damaged, you can replace just that section rather than the
Use low maintenance options
In addition to durability, consider low maintenance products. For example, wood decking may need repair and painting every few years. Composite decking, on the other hand, wouldn’t require any ongoing maintenance. Although you may spend more money up-front for some items, you will spend less money and time in the long run.
Landscaping can be a very time-consuming task. It’s a rewarding one when you take care of your own home, but you probably don’t want to visit a rental property every week to work on landscaping there. Reduce the amount of time, energy, and money needed to maintain rental properties by simplifying the landscaping. For instance, select plants that don’t require constant pruning and trimming. Remove or relocate excess plantings. Mulch and segregate areas in a manner that make it easy to maintain.
Be aware of your legal responsibilities
There are many laws relating to landlords and tenants. Be sure to get up to speed on the law and your responsibilities as a landlord including what to include in leases, how security deposits should be handled, and who is responsible for shoveling snow in the winter. The best way to preserve your rights and avoid unnecessary headaches is to comply with the law!
Require renter’s insurance
Our last tip for converting your primary residence to a rental property is to require your tenants to carry renter’s insurance. Your homeowner’s insurance policy will not cover everything. A tenant’s policy would ensure that their property and liabilities are covered in cases where yours does not or should not. Contact your insurance agent to learn more.
Before you decide to convert a primary residence to a rental property, be sure to evaluate the financial impact of selling versus renting. What costs might you incur for a rental property?
What risks are involved? How much might you earn when selling down the road? How does that compare to your earnings if you were to sell now?
The real estate market is good right now, which means both rental rates and selling prices are high. Only with a realistic financial analysis can you make an informed decision on whether to rent or sell your property.