The Washington DC, Maryland and Virginia areas have all been hit hard with an influx of homes for rent on the market. The same holds true for all parts of the country as well. Many homeowners are trying their hand at being landlords in an effort to avoid foreclosure on their homes. Is this really the right thing to do or not? Of course, each person’s circumstances will come into play as each try to decide what is best for them. There are a few things to consider first before jumping on the landlord bandwagon.
Of course, no one wants a foreclosure on their credit score. Today’s world depends so much on what your credit score is. Now, you have to have a good credit score to find a job and to just open a checking account. Due to this aspect of a looming foreclosure, many people are putting those homes on the market for rent or lease. This makes the payment for that home, then the homeowner can buy a new home with lower payments and everything works out, right. It should, but it doesn’t always. Let’s look at why.
Have you considered what would happen if the tenant decides they can’t make the payments on the rental property any more and leaves abruptly? Your payment is due, the tenants are long gone and you don’t have enough money to cover the payment. This is the leading cause of worry for landlords. Sure, you will have to get the home rented again as soon as possible. But, you may also have repairs now due to the previous tenants. These have to be fixed before allowing someone else to move in. It is very important to impose a deposit from new tenants and keep that money in a fund to help with instances such as this.
At this point you are stuck between a rock and a hard place as far as which way to go. This is where each person has to decide what is right for them. Be sure you investigate all of your options before choosing to rent your home out versus putting it on the market for sale. It may be that you have enough equity in the home that it would be better to sell it than rent it.
Speak with your lender today. Better yet, speak with several so you can weigh your options with a more responsible decision. You certainly can’t go wrong either way, just make sure the decision is the right one for you and your family.