Tips For First-Time Landlords
- You can't or don't want to sell your existing home.
- You can move to another home for less than the income you could get for renting your home.
If those two statements ring true for you, becoming a landlord might not be a bad idea.
The housing recovery is underway, but it could still take years for many homeowners to surface from their underwater status. Selling now would be selling at a loss.
Other homeowners aren't underwater, but don't have enough equity to sell at a decent profit. Selling now could be only a break-even proposition.
The deal can even work if the home you move to costs the same as or even more than your current housing costs, provided your new housing costs are sufficiently offset by the rental income from your existing home.
Do the math
In the best of all worlds, the rent should cover not only your existing home's mortgage, but property taxes, insurance, upkeep and other costs of owning a home. If not, you'll have to make up the difference.
However, you face a greater obstacle than making the deal pencil.
Hiring a property manager could cut into your rental income, but landlording, especially for first-timers, is not a piece of cake.
Take some cues from T.J. Rubin, broker owner of Fulton Grace Realty in Chicago.
He offers some tips to help you make the transition to a new job as a landlord.
DeadlineNews.Com Mark K. Hicks is broker/owner of The Seabrooke Group in San Jose, CA. Hicks, who takes a "client for life" approach to business, has more than 20 years real estate experience, including creative financing, foreclosure acquisition, probate sales and tax-deferred exchanges. Network with Hicks on LinkedIn.