So You Have Decided to Rent rather than Sell.
January 23, 2008
Your home has not sold and you must move due to a job transfer or some other personal need. You decide that you will rent your home until the market improves. We often have sellers who ask about the possibility of renting their property.
If you decide to become a landlord, there is much to learn. What do I charge for rent? How much security deposit should there be? Can I say no pet? Can I say no smokers? Can I say no children? These can be crucial issues for a new landlord. Yes you can say no pets - unless the renter has a seeing eye animal or some other animal that assists the renter. Yes you can disallow smokers. But NO, and a very big NO, you can not discriminate against children. Discrimination laws are important for every potential landlord to read and understand.
The best way to meet fair housing laws is to set your criteria for qualifying tenants and then stick to it. If the potential tenant must have income 3 times the monthly rent, make certain that you evaluate every applicant against that requirement.
Renting your home is much more than placing an ad selecting a tenant and collecting rent. It can involve repairs and sometimes the unpleasantness of late rent payments. There are property management companies you might want to employ so as to have a professional deal with the issues that arise. Becoming a landlord can be a necessary step if you must move and find selling difficult. However, before you change from being a potential seller to being a landlord, it would be wise to make a chart of the pluses and minuses of each role.
Finally, remember that to have the $250,000 exclusin from capital gains for a single or $500,000 for a couple you must have lived in the house 2 of the last 5 years. If you decide to rent because you don;t want to sell in a down market, you want to remember these time frames.
If this is your main motivation, consider it carefully. Are you betting that the market will be better next year and that your house will still be as crisp and clean as it is pre tenant? Soooo,
you really want to be a landlord?
Your home has not sold and you must move due to a job transfer or some other personal need. You decide that you will rent your home until the market improves. We often have sellers who ask about the possibility of renting their property.
If you decide to become a landlord, there is much to learn. What do I charge for rent? How much security deposit should there be? Can I say no pet? Can I say no smokers? Can I say no children? These can be crucial issues for a new landlord. Yes you can say no pets - unless the renter has a seeing eye animal or some other animal that assists the renter. Yes you can disallow smokers. But NO, and a very big NO, you can not discriminate against children. Discrimination laws are important for every potential landlord to read and understand.
The best way to meet fair housing laws is to set your criteria for qualifying tenants and then stick to it. If the potential tenant must have income 3 times the monthly rent, make certain that you evaluate every applicant against that requirement.
Renting your home is much more than placing an ad selecting a tenant and collecting rent. It can involve repairs and sometimes the unpleasantness of late rent payments. There are property management companies you might want to employ so as to have a professional deal with the issues that arise. Becoming a landlord can be a necessary step if you must move and find selling difficult. However, before you change from being a potential seller to being a landlord, it would be wise to make a chart of the pluses and minuses of each role.
Finally, remember that to have the $250,000 exclusin from capital gains for a single or $500,000 for a couple you must have lived in the house 2 of the last 5 years. If you decide to rent because you don;t want to sell in a down market, you want to remember these time frames.
If this is your main motivation, consider it carefully. Are you betting that the market will be better next year and that your house will still be as crisp and clean as it is pre tenant? Soooo,
you really want to be a landlord?
posted by shirley harry at 7:56 PM
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