Should I Rent My House Instead of Selling It?

The results of Fannie Mae’s June 2015 National Housing Survey, were just released showing that more and more homeowners are warming up to the idea that now may be a great time to sell their home.

The amount of respondents that stated that now is a good time to sell rose three percentage points to a survey high of 52%; which may translate to a healthier market as more homes are listed in the coming months.

At the same time “the percentage of respondents who expect home rental prices to go up rose to 59% – a new survey high.” Doug Duncan, senior vice president and chief economist at Fannie Mae, gave this insight: “The expectation of higher rents is a natural outgrowth of increasing household formation by newly employed individuals putting upward pressure on rental rates.”

There is a chance that those who believe rental prices will rise may consider renting their house rather than selling it at this time.

However, if you have no desire to actually become an educated investor in this sector, you may be headed for more trouble than you were looking for. Are you ready to be a landlord?

Before renting your home, you should answer the following questions to make sure this is the right course of action for you and your family.

10 Questions to ask BEFORE renting your home

1. How will you respond if your tenant says they can’t afford to pay the rent this month because of more pressing obligations? (This happens most often during holiday season and back-to-school time when families with children have extra expenses).
2. Because of the economy, many homeowners cannot make their mortgage payment. What percentage of tenants do you think cannot afford to pay their rent?
3. Have you interviewed experienced eviction attorneys in case a challenge does arise?
4. Have you talked to your insurance company about a possible increase in premiums as liability is greater in a non-owner occupied home?
5. Will you allow pets? Cats? Dogs? How big a dog?
6. How will you actually collect the rent? By mail? In person?
7. Repairs are part of being a landlord. Who will take tenant calls when necessary repairs come up?
8. Do you have a list of craftspeople readily available to handle these repairs?
9. How often will you do a physical inspection of the property?
10. Will you alert your current neighbors that you are renting the house?

Bottom Line

Renting out residential real estate historically is a great investment. However, it is not without its challenges. Make sure you have decided to rent the house because you want to be an investor, not because you are hoping to get a few extra dollars by postponing a sale.

Definition of Escrow

Escrow is defined as a deposit of money or funds entrusted to a third party to take responsibility for the insurances and taxes. Whether you are a buyer, seller, you will need to understand escrow, as it is part of the real estate process.

It is likely in the buying or selling process, you will borrow money from a lender in the form of a mortgage and repay it monthly to the bank for a specific period of time. Aside from your monthly payments on a home, you will also be responsible for monthly insurance and taxes in the form of escrow. Occasionally, people are unable to pay the monthly payments and the insurance and taxes together, which is where escrow comes in. A lender will offer you that he/she will be the one to take responsibility for the monthly insurance and taxes, with the lender earning interest.

Homes for Sale in Fort Worth suggests that you escrow your homeowner’s insurance and taxes to automate the process. We know that is requires a significant money to start an escrow account, but it will ensure payment of your insurance and taxes.

Call Homes for Sale in Fort Worth TX today.  We are here to guide you throughout the real estate process, may it be selling or buying a home.