Real estate agents occasionally run into a situation where their buyer wants to rent out their current home and buy another one. In this case, the buyer has several items that need to be researched before choosing this option.
- Is the house rentable? This is a good topic to discuss with your real estate agent. They can ask them what is in demand in the area. The agent can, also, give you an idea of rental prices in the area.
- Finding a tenant. Lenders may be hesitant to give someone a send mortgage unless a tenant has been procured for the first home. They usually want a lease signed with a security deposit and the first month’s rent paid.
- Can you rent out your home? Honestly, this is the first thing that should be checked into. There may be a clause in the mortgage agreement that says the owner has to live in the home for a set amount of months before they can rent it out. Other mortgages may not allow them to rent out the home until the mortgage is satisfied.
- Will the home produce enough income? With the two homes will come two mortgages. The owner needs to make sure that they have enough money to cover the two mortgages in case the tenant leaves early.
- Other considerations. The owner should look into landlord insurance. This will cover liability and property damage. Also, the owner look into renter’s insurance so they can give the tenant an idea of how much it would cost. Next, the owner should speak with a tax attorney. The additional income, taxes and other items associated with the rental property will change up how the taxes are paid. It is find this out before renting starts so there is not a huge bill come tax time.
These are just a few items that a home owner will need to look into before renting out their home. For additional information, click on the link below.
Read the Original Article Here: How to Buy a Second Home and Rent the First
