To Rent or Sell?
When deciding whether to rent vs. selling your current home, think about your plans for your next home. Many times, it will be necessary to sell the home in order to qualify to buy another one. Lenders won’t usually allow the income from renting the current home to be considered unless you already have a proven track record as a landlord with other rental properties. Or, they may only allow the rental income for a certain number of months to count toward your income (assuming that the rental property will be vacant for a portion of each year).
If you are able to get financing for a home without selling, decide if you want to be a landlord. Personally, I think it’s a great option but we have close friends who would never consider owning rental property. He’s not “handy” and has no interest in having to deal with emergencies that may come up at inconvenient times, much less finding good tenants.
Rent vs. Selling your current home
The advantage to owning a rental property is that your mortgage is paid by the rent you collect. You do need to make sure you have some reserved funds to make repairs and do general maintenance between renters.
The location of the rental property is important in making the decision. Is it a property that would be easy to rent? In Athens, there are certain areas that are better suited for college students. You also need to be aware of the county ordinance that prohibits more than 2 unrelated tenants from living together in a residential neighborhood (this doesn’t include most condo developments).
If you decide to keep your current residence as a rental property, there are management companies that will handle the process for you. The standard fee for finding a tenant is 1 months rent. The property management fee is 8-10% of the rent collected each month. Then, you pay for repairs, but the management company will arrange for the work to be completed. There may a fee for coordinating the contractors.
Here’s an article that gives more questions to consider if you’re thinking about renting instead of selling
If your tenant does a lot of damage to the property or doesn’t pay the rent, you could lose several months rent from going through the eviction process and the costs to make repairs. It’s so important to do a credit check and check previous landlords and employment.