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Renting a HouseRenting a house or a room in your home is a great business that millions of people take advantage of to make some extra cash. While many people rent houses each year, not all of them are successful. Renting a house can be profitable and rewarding if you manage it properly.
Benefits of Renting a House
The main reason for renting a house is you can gain a large steady income. Many people buy rental houses in areas that have a constant flow of tenants and rent them for much more than the cost of the mortgage. Or, you have decided to sell, but the property value is lower than you expected. Over time, a house rental will increase in value and you will gain capital appreciation in addition to a steady rental income.
Typically, a house will rent for a lot more than an apartment. They generally will offer more space and they are usually rented by groups such as families, professionals or students as an alternative to buying or renting smaller spaces.
Another benefit of renting a house is to use it as a vacation home and only rent for part of the year. Many people buy shore homes and rent them except for a few weeks of the year.
Don't forget about the tax advantages. Any tools, supplies and services you purchase for the house can be a tax deduction.
Challenges of Renting a House
Of course there are many challenges to renting a house. While rental income may be bigger, if a property goes un-rented for a period of time, you stand to lose more if you can't find tenants.
Maintenance of a home rental can also be challenging. Regular painting, lawn care, snow removal can require constant attention or qualified professionals that will cost you money.
Questions from your tenants on how things work, requests for repairs and rent collection can also take away from the experience of house renting.
House Renting Tips
1. Have tenants share some of the responsibilities. If you have a small yard, require the tenant take care of lawn and snow removal. Provide tenants with tools they need such as a mower, rake or shovel and assist whenever possible.
2. Collect utilities in advance. Often utilities will be in your name and difficult to recoup from tenants, especially after they are no longer renting your house. Determine the average cost of utilities used and include that amount in the rent.
3. Make the tenant feel at home. When renting a house, you want the tenant to stick around for a long time. Do something special, or provide a service that makes it hard for your tenants to want to leave.
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