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No matter how you spin it, selling a home these days is a tough business. And when the going gets tough … well, most folks try to find an "easier" way. That's why many homeowners who are having trouble selling their homes consider becoming landlords by renting out their current homes.
This isn't a bad idea. But like any real estate deal, you have a lot to consider before you make your final decision:
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You need to be debt-free.
Renting out your home is a real estate investment. Dave doesn't recommend real estate investing until Baby Step 7, when your home is paid off and retirement and college savings are well underway.
You're not going into debt to buy your next home.
While it's okay to get a mortgage to buy a home, you should never invest with borrowed money. Owning both homes outright dramatically reduces your risk.
You won't be moving too far away.
It's tough to be a long-distance landlord—even more difficult if it's your first experience. Look at it this way: You'd never consider buying a home in a far-away city as an investment. So it doesn't make sense to hold onto one either.
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You want to invest in real estate.
Don't rent out your home because you feel like you have no other choice. Real estate investing can be a hassle. If you choose it by default, you'll probably end up regretting it.
If this describes you, great! You have one more option and opportunity. Your next step is to consult legal and real estate experts who will help you make the successful transition to landlord. Learn how to find the right renter for your home and avoiding the normal landlording pitfalls.
Get Top Real Estate Advice
If you're interested in buying, selling or renting, the advice of an experienced real estate professional will save you time and money. Dave's real estate Endorsed Local Providers (ELPs) are experts in your community who will give you the same great advice Dave would. Contact your ELP today!