How to Choose Price Considerations for Renting Out Your Home
Remember, your home is an investment. Investments are meant to make you money. If you're ready to rent it out, you should make sure and consider everything when deciding upon a price.
Ask yourself the following questions:
- What is my monthly mortgage?
- How much are similar homes in this neighborhood renting for?
- Will I have funds to pay for home repairs?
- How much would a property management company charge?
- How much of the deposit will be refundable?
- How much extra would I like to bring in monthly to make this investment worth it?
- Is my final price competitive in my area?
Now that you're deciding about price, you can start thinking about maintenance, marketing, accounting, insurance and all of the other nitty gritty that goes along with being a landlord. Have a great time with your venture!
Consider Hidden Costs
Some of these items may affect the cost and profit. It's a good thing to compare your home as a rental property
to others in the neighborhood. Find out how many of the homes in your area are rental properties and compare their value to yours. While it would be helpful to ask some of the owners questions about their experience, you can also look online for the home value and for the median rent rates in your area. Other things to consider are whether you plan on selling in the future and if you will be pegged with a capital gains tax if you wait too long. Some states charge taxes on rental property profit, but thankfully you can write off many of the costs associated with renting the house. It is also important to factor in potential legal costs, such as the cost of evicting a tenant. Getting familiar with your state's tenant landlord laws will help prevent a potentially expensive disaster.
With a little research and planning it is entirely possible turn your home
into a profitable and pleasant investment Have a great time with your venture!