What to Know About Renting Your Home
With the terrible market for selling a home, many home owners are turning to renting out their homes to make ends meet. However, renting out a home that you once lived in is easier said than done, and there are a lot of nuances that you should know about. Here is a short list of things to consider when renting out your home.
Your Mortgage
The first thing you should check into is your mortgage, and will it allow you to rent your home. If you got a mortgage as owner occupied, you typically have to live in the home for at least a year before you rent it out. However, some mortgages have clauses that you can’t rent out the home at all. If your mortgage company finds out that you are renting your home, you may have to repay the full mortgage in a short period of time. This may essentially force you to refinance, which may or may not work out.
Your Insurance
The next thing you need to consider is your insurance. Instead of a traditional homeowners insurance policy, you need landlord building insurance, which is essentially just like the fire policy on your home insurance. The difference is that since you no longer live in the home, you don’t need personal property insurance coverage – you only need to insure the structure itself. This can actually save you money on your home insurance premiums every year.
Other Things to Consider
Finally, you need to make sure that you check in with your local government office. Every local government has different restrictions when it comes to dealing with renters. Some examples include rent control, specific forms that must be signed, and even registration as a landlord with your local government. Some governments even require fees and deposits to be made by landlords.
If you’re going to rent your home, you want to make sure that you’re in compliance with all local laws regarding rental properties. You could be subject to huge fines if you’re not in compliance, and this could wipe out any profits from renting your home.
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If you can’t see yourself performing these roles, it doesn’t mean you can’t pursue your rental plans; you just might be one of the people for whom it’s worth paying a professional property-management service. In fact, if you are out of town, consider the decision made; you simply must be on site to manage a rental.