For an additional source of passive income, many homeowners choose not to sell one of their homes when they move. Instead, they’ll allow families to rent the home, giving the original homeowners an extra monthly check to add to their bank account. However, there are several things that you have to factor in before doing this as you can easily run into financial trouble.
Mortgage
If you still have mortgage payments on the property that you’re looking to rent out, you’re just adding more to your plate. While the monthly income would be nice, it might not be able to cover other costs that you need to take care of – repairs, fees, etc. Before you make the move, be sure that you can afford having a second home under your name. In no case should this be a dependent source of income as you may have a high turnover rate when it comes to tenants.
Don’t Forget About Your Home
Just because you’re now a landlord, doesn’t mean that you can completely set aside your investment. Tenants have needs and things often can go awry. You need to be prepared to address issues that may cost you more money that you bargained for. If the house has plumbing issues or a burst pipe, guess who’s going to have to pay for it? That monthly check might start looking like it’s not worth it after the amount of work that you have to put in. If you’re prepared to handle all these problems on a whim, then there shouldn’t be much concern.
Bio: Kuba Jewgieniew is the head of Realty ONE Group, a full-service real estate brokerage firm with nearly 6,500 associates headquartered in Irvine, California.