Recently, I’ve been getting a lot of phone calls from potential Pasadena home sellers that are considering renting vs. selling. Mostly, the questions come from homeowners that are relocating to another city for work or have just inherited a house. Initially, they want to understand how much the home is worth and, should they decide to hold on to it, what kind of rent they can get in their neighborhood.
There is a great outlook on residential rentals. Rents are expected to skyrocket, thereby being a landlord and holding on to your residential property as an investment could be the right decision. However, before renting your home, you should answer the following questions to make sure this is the right course of action for you and your family.
10 Questions to Ask BEFORE Renting Your Home
1.) How will you respond if your tenant says they can’t afford to pay the rent this month because of more pressing obligations? (This happens most often during holiday season and back-to-school time when families with children have extra expenses).
2.) Because of the economy, many homeowners can no longer make their mortgage payment. What percent of tenants do you think can no longer afford to pay their rent?
3.) Have you interviewed a few experienced eviction attorneys in case a challenge does arise?
4.) Have you talked to your insurance company about a possible increase in premiums as liability is greater in a non-owner occupied home?
5.) Will you allow pets? Cats? Dogs? How big a dog? Birds?
6.) How will you actually collect the rent? By mail? In person? Bank account deposit?
7.) Repairs are part of being a landlord. Who will take tenant calls when necessary repairs arise?
8.) Do you have a list of craftspeople readily available to handle these repairs?
9.) How often will you do a physical inspection of the property?
10.) Will you alert your current neighbors that you are renting the house?
Again, renting out residential real estate historically is a great investment. However, it is not without its challenges. Make sure you have decided to rent the house because you want to be an investor, not because you are hoping to get a few extra dollars by postponing a sale.
Questions above were originally published here.