Whatever your original plan might have been, if your move date is quickly approaching, it might be time to reevaluate your options. You may not have planned to become a landlord, but is now the time?
Should you sell? Rent? Let’s take a look at the options.
Become a Landlord
If you own your home, odds are that you bought it because you loved it. Perhaps you are at a duty station that you might come back to, or maybe you purchased your home with the idea of rental income in mind. What should you consider when deciding whether or not becoming a landlord is for you?
- When you rent your home, you retain ownership. You have a home to come back to if you return to this duty station.
- In many military communities, the rental market is strong enough to raise rental prices higher than most mortgages. Depending on your payments, renting your home could offset the cost of your mortgage, insurance and taxes.
- Becoming a landlord is not just about rental income, however. Chances are that you will be living far enough away that managing your rental (emergency repairs and regular maintenance) may present a challenge.
- Your home will need to be listed with AHRN.com and other listing services to attract potential tenants.
- Hiring a property manager offers a tremendous resource for qualifying tenants, addressing emergencies and handling maintenance – but it also is an expense that cuts into profit generated by rental income.
On The Market
There is still time to sell your home – the height of the PCS season is yet to come and many people choose not to get serious about buying a home until they’ve arrived in the area.
One key component is to check the fine print of your mortgage – there are some companies and mortgage terms that do not allow for the property to become a rental. While these clauses are relatively rare, it is something you want to be aware of before it becomes an issue!
Financial concerns are a common motivation for renting – paying the costs of your current home while it is on the market plus the costs of your home at your new duty station can quickly become prohibitive. However, becoming a landlord also has associated costs:
- Plan for your home to be empty at least one month a year while finding a new tenant – where you are responsible for the mortgage.
- You will still be responsible for the property’s maintenance, like replacing the stove or HVAC unit if needed.
- There will be costs to turn over between tenants.
Start by identifying your long term plans. If you are looking to come back to your current duty station, then there is added incentive to hold on to your home and rent it out. Is the rental market or homes for sale market in better shape? How much of a savings do you have to support either option? Answering these questions will help you to identify the best option for your home.
We want to know!
What is the deciding factor for your family when choosing to rent or sell?