How can you tell if your home is a good candidate to convert into a rental? Consider these three points.
Should you sell your home or rent it out? It’s a question we’ve been discussing recently, and you can see the first part of our discussion here.
The question we’ll address today is how to determine whether your home makes for a good rental property. There are three points to consider when making this decision:
1. Is it a smart rental property? Have you done so many cosmetic improvements that it will cost you a lot of money to get it back to a saleable state when the times comes to sell it down the road? A renter living in the home for around five to seven years might leave it in a condition that isn’t conducive to selling the home.
“Condos and townhomes tend to be easier to rent.”
2. The type of home: Is it a single-family home, a condo, or a townhome? Condos and townhomes generally make smart rental properties because they’re small and easy to rent. You’ll always have tenants looking for a smaller property to rent. Single-family homes tend to be larger and rented less often than condos and townhomes. Condos and townhomes also tend to be cheaper to turn over when it’s time to sell them since they’re smaller. You also won’t have to spend as much on things like flooring and paint in a smaller space.
3. Growth potential: If a property is in an area with lots of growth potential—meaning it will look very different in five to 10 years—it might be better to keep it as a rental property. Eight years ago, I bought a property in South Arlington based on the potential, and it has paid out in spades. I’m always able to rent it and its value has increased.
All these keys should give you an answer as to whether your home will be a good rental property. If you’re thinking about moving and you’re not sure if it’s smarter to sell your house or rent it out, don’t hesitate to give me a call or send me an email soon. I’d love to help you make the right decision for your home.
