Many people favor the idea of generating some extra income by buying a second home and renting it out to tenants. Doing so can certainly be profitable; your tenants will put money toward the mortgage of the property and in a matter of years, you'll have the property paid off. This will allow you to either sell the home at a profit or continue renting it out — and pocketing the rent check each month. Before you pursue this business venture, however, it's important to ask yourself a series of questions that you can pledge to answer honestly. The answers can often influence whether you should proceed with your plan or wait a little longer. Here are some sample questions.
How Will You Handle Repair Jobs?
While you can often put off repair jobs in your own home, this isn't an option when you're managing a rental home. When your tenants come to you with a complaint, you need to be able to have it fixed promptly. Think about how you'll take care of such issues. If you're a handy person and plan to do the work yourself, do you realistically expect to have time? Or, if you would hire contractors for the work, do you have a network of reliable contractors on whom you could rely?
Can You Pay The Mortgage On My Own?
Many people rent homes and have their tenants essentially pay the monthly mortgage bill. It's important, however, to have enough access to funds that your rental home doesn't become a financial burden. For example, if a tenant doesn't pay the rent on time, do you have the funds to cover that month's mortgage bill? Or, if the tenant moves out and it's a couple months until you can find a replacement tenant, are you financially comfortable paying the mortgage on the rental home in the interim?
Do You Have Someone Reliable To Help When I'm Away?
If you often travel for business or just enjoy taking vacations with your family, you can't let your rental home and your tenants be ignored during this time. Think about anyone in your circle of friends or family members who could deal with small day-to-day issues in your absence. For example, you might have a brother who can assess any issues that the tenants encounter and contact someone from your network of contractors to fix the issue in a timely manner.
For more information, talk to a professional like Rosenblum Realty, Inc.