If you’re thinking about selling your home, or about renting it out to tenants, there are some factors you should consider first before you take the plunge, one way or the other. You can of course, have some conversations with property manager to find out what it’s like being a landlord, so that you’ll be better prepared for the experience.
This may actually have some value, because you’ll be getting some accurate and relevant information when discussing local conditions with your friend. If you only intend to sell, that won’t be quite so involved, and you already know that it will simply mean you’re no longer associated with the specific property being sold. Here are some of the questions you should put to your local property manager, so you can be better informed.
What is the rental market like in this area?
It’s essential to know what the rental market is like in your area, because if there are few renters, all the property owners will be chasing that small group of potential tenants. On the other hand, if there are numerous local renters looking for housing, you should have no trouble finding a suitable tenant for your property.
What are the implications of owning multiple properties?
Ask your property manager friend how much operating capital they have in the bank for each property they own. Is that amount of money enough to maintain the properties, and still enjoy a decent quality of life in their personal lives? Was the income from these properties sufficient for saving up money to purchase a new home?
What effect do taxes have on renting vs. selling?
If you sell your house, you won’t really get any tax considerations at all. However, if you rent it out, you’ll be entitled to some nice tax deductions. If the property manager you ask has done this themselves, they probably were able to depreciate their house at the following rate: add up the total cost of the house plus any improvements, and divide by 27.5, which is the standard depreciation rate. That’s the amount you can deduct annually, as well as repair costs and property taxes.
What are your own plans for the future?
Don’t be afraid to ask your property manager friend what their plans are for the future, because it may have relevance to you personally. Are they considering moving back into the rental unit at some point, or have they already rented a home with the intention of buying later? There may be some fine points about these scenarios which you have not yet considered, and if your property manager friend has already been though it, there may be some worthwhile advice to be gleaned.
What is it like being a landlord?
You will want to know how much maintenance and do-it-yourself type of work is likely to come about when being the landlord of your rental unit(s). If you are not particularly adept at DIY projects and ordinary housework, you may not be suitable as a landlord. With everyday usage there are always things happening to a dwelling, and they have to be repaired so that tenants can continue their normal daily lives. Also, if repair projects pile up on you, are you the kind of person who will easily become burned out with having to service the requests of tenants? Before renting out your house, you need to be sure you have the right temperament and skills to be a property manager.