Are you trying to sell your house and not having much luck at the moment? If so, all hope isn’t lost! You could rent it out in the meantime as you wait for the housing market to become favorable.
Renting out a house can provide you with a myriad of benefits. You could earn a recurring monthly income, reduce your tax bill, and build equity through multiple ways.
What’s even better, even without the right landlording skills, you could hire a reputable property manager to manage it on your behalf.
A good property manager will help you find a quality tenant quickly, respond to maintenance issues, and collect rent on time, every month. Keep reading to learn more!
What Are Some of the Benefits of Renting Out a Home?
You Can Still Sell Your House at the Right Time
Renting out your house doesn’t mean that you cannot sell it when the housing market becomes favorable to you.
In a buyer’s market, the supply of homes on sale exceeds the buyer’s demand. And in such a situation, selling your house can be stressful. That’s why it might be in your best interest to hold on to it a little longer until the market favors sellers like yourself.
As such, renting out your house provides you with some flexibility, all while helping you generate a passive income.
Earn a Recurring Rental Income
This is inarguably the single largest benefit of renting out a home. If your house is in the right location and is desirable in prospective tenants’ eyes, you can earn a decent passive income month after month.
This can help you pay down debt, shore up your savings, or meet other financial goals faster.
That said, for everything to work out, you must be able to manage the property effectively. Alternatively, you can hire a professional property manager to handle everything on your behalf.
Build Equity over Time
Essentially, home equity is the difference between the amount the mortgage owed and your home’s worth. You can build equity through multiple ways, including the following.
- Charging the right rent that guarantees you a positive cash flow every month.
- Choose reliable tenants that will care for the property and pay rent on time, every month.
- Leverage tax benefits to minimize your property expenses.
- Increase your property’s value through renovations and upgrades.
- Make accelerated payments on your mortgage principal.
Take Advantage of the Numerous Tax Breaks
Besides capital growth and regular income, renting out your house can also allow you to take advantage of certain tax deductions. These can help you reduce the income tax on your rental profits.
The following are some of the possible deductions you can make when filing your income tax.
- Cost of your travel expenses, which can include things like airfare, hotels, or car mileage.
- Your mortgage interest if you didn’t purchase the property outright.
- Costs of repairs done to the property.
- Costs of hiring professional services, such as attorney fees or property management fees.
Why Should You Hire a Property Management Company?
As you can see, renting out a property comes with a bevy of benefits. But, as with any other investment, there are some risks involved. For example, you may rent to a difficult tenant. This may result in unpaid rent, lease violations, or damage beyond normal wear and tear.
Ideally, if you have little to no experience being a landlord, consider hiring a property management company. The following are questions you can ask yourself to gauge your suitability.
- • Are you familiar with the local landlord-tenant laws?
- • Can you determine how much rent to charge tenants?
- • Can you draft a legally sound rental agreement?
- • Do you know how to screen prospective tenants, including checking their creditworthiness and background?
- • Are you willing and able to dedicate the time and effort required for property management, such as rent collection and maintenance?
If any of those responsibilities seem arduous, your best option is to hire a professional. A property manager can help you reduce stress and maximize the return on your investment. The following are some of the responsibilities a property manager can help you handle.
Marketing Your Rental Property
A property manager can help you draft a proper rental ad that highlights your property’s best features and complies with the state’s fair housing laws. In addition to this, they will help you syndicate it extensively to multiple platforms for maximum reach.
And the larger the prospective tenant pool, the higher your chances will be of finding great tenants.
Screening Potential Tenants
Experienced property managers will usually have interacted with all types of tenants during the course of their careers. As such, they will know exactly what kind of tenant to look for. They will also have a proven tenant screening system to help them during the vetting process.
They will know what to check in a tenant’s rental background and what to ask prior landlords, among other things.
Maintain Your Rental Property
Once you hire a property manager, you won’t have to worry about responding to repairs and maintenance. Imagine a tenant calling you in the wee hours of the morning because of water leaks, clogged drains, burst pipes, or faulty wiring. It can be stressful, right?
A property manager will save you such hassles. They will also routinely inspect the property to ensure everything works as it should.
Conclusion
Just because you’re unable to sell your house at the moment doesn’t mean you are short of options. Renting it out can be a great way to generate a steady, passive income. But, it requires due diligence and a lot of work to become a successful landlord.
MTD Property Management is a top property management company in Chicago. With our highly qualified staff, prompt response, and personalized attention to detail, you can’t go wrong by choosing us. Get in touch with us NOW!
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