Turning your current home into an additional revenue stream can be an easy way to cover part of the cost of your mortgage. Letting out your property is a great idea whether you are looking to buy a second home, or earn an extra income off your largest asset.
You don’t need a huge property to make this happen. But there are a few things to consider.
1. Buy a home that offers flexibility
If you are looking at buying a home with the sole purpose of letting it out, try to find a property with a detached or semi detached apartment. Having two rent incomes is never a bad thing!
Look for the following characteristics when choosing a home:
- Large driveway / parking space.
- Semi Detatched area of house.
- Multiple entrances (one for you, one for tenants).
- Preferably have multiple bathrooms, one per guest room.
- Room for growth, look for a house with space to expand and with rooms that can serve as both living areas and sleeping areas.
2. Short term or long term rentals?
If you’re considering living on the same property as your rental, a lot of people opt for the Airbnb short term approach. In Florida alone there are over 32 000 AirBnb hosts currently in operation. AirBnb or short term renting offers you a way to keep the rental space available should you have the in laws visiting or guests from out of town.
Also, if you’re living in a small home you might not want the commitment of having a long term tenant living in your space.
Consider long term renting if you have a detached section of your home or if you are buying into a new area to expand your property portfolio. Long term renting is often seen as the safe option, you can secure an income for a long period of time and not have to worry about the daily upkeep of a short term rental.
Although long term can be an attractive option, home owners still need to manage their property efficiently. Maintenance, rent collection and finding trustworthy tenants are just some of the things you will need to deal with.
Hiring a property manager such as Greene Realty can go a long way in helping maintain your property and collect rent on time. A well written rental agreement is essential when putting someone on your property. Seek the help of professionals to make sure you have covered everything there is when letting your place long term.
3. Make it worth your while.
What’s the point of going through all the hassle of dealing with tenants, changing bedding, maintaining a second home and chasing up rent money?
Ask yourself what is it you hope to achieve by putting your rental on the market. Find out what other properties in the area are priced at, check to see how many are occupied and work out a price that you wish to receive and that your potential tenants would be willing to pay.
Make sure your rental income will cover any and all expenses relating to the rental. More often than not rent prices can cover your mortgage, provided you had a decent down payment when you got financing. Whether renting is worth your while is a personal question that you will have to answer.
Some of the things most homeowners seek when letting their properties.
- Paying for the mortgage (or a portion) of the home.
- Covering household expenditure and living costs.
- Saving this additional income for;
- College funds
- More property purchases.
4. Area’s to buy and rent your second home.
When buying a home with the intention of renting it out, look to buy in the following types of areas. These are all areas with strong rent potential.
- Popular Vacation Spot.
- Student Town.
- Central Business District.
- Up and coming area.
One of the obvious issues of owning a rental is not having a tenant in your house. It leaves you with a property that isn’t generating an income and means you have to pick up the mortgage while you find another tenant. That’s why you should always stick to areas with a lot of tenants needing places to stay.
A sure way of ensuring you always have a tenant is to hire a professional property manager. We have lists of people looking for places to rent and have over 40 years experience in linking trustworthy tenants with properties that suit their requirements.
Greene Realty boasts a 95% occupancy of the properties we manage in the West Volusia Area.
5. Don’t sell your home when you move.
Keep your home that you’ve been paying for for the past few years. When you choose to move into a new home, it’s time to expand your portfolio, not get rid of your current investment.
Whether you are moving out of state or down the road, keep the home you currently own and rent it out to cover its expenses. Soon enough you’ll have a paid off property that’s bringing in a healthy new stream of income for you.
Keeping your property does require some management, this is where, once again, the real estate professionals and property managers step in to take this pressure off of you.
Contact us at firstname.lastname@example.org today for advice on how to turn your current home into a successful rental. We can help you manage your property and find quality tenants.
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