Renting Your House

If you’ve moved to a new home but have not been successful at selling your old one, there may be an alternative to making a mortgage payment each month on a vacant house. Renting your home out may allow you to cut costs while you wait out the real estate slowdown.

Before you decide to rent your home, make sure you understand the advantages and disadvantages of renting your home.

Advantages to Renting

Rental income can cover some or all of the mortgage payments, freeing you from having to dole out the entire amount each month. You might even make a profit if your monthly expense is low enough.
You may be able to continue to build equity at the expense of the renter — especially if your particular market is not affected or minimally affected by the slowdown. If your mortgage has been in existence for a number of years, more of the payment may be being applied to principal, so every payment is eating into the amount owed at a faster clip.
Landlords gain tax advantages in addition to the regular deductions of mortgage interest and taxes.

Disadvantages to Renting

Mortgage payments must be made even when the rental property is uninhabited.
Costly repairs and maintenance work cannot be delayed if it inconveniences the tenant.
Disputes with tenants over tenant rights and unpaid rent could require legal representation and legal fees.
State, local and federal statutes must be understood and followed, with failure to do so often resulting in fines.
Business costs. As with any business endeavor, there are expenses you can expect upfront, such as renovations or repairs prior to a tenant’s move-in date and advertising.
Possible property management or real estate fees.

If you decide to rent your home, you’ll have to consider how much contact you’ll want to have with renters. For a fee, a property management company or real estate agent can act as an intermediary between you and your renters. A property manager can collect the rent, find and prescreen tenants and handle maintenance contracts as well.