Should I Keep My House As a Rental?
How to Decide to Sell or Rent a Home?
Hey there, this is Mike from Mike Buys Houses. I was just walking through a property with a homeowner who is moving out of state and he was trying to determine what he should do with the property. Should he keep it as a rental or should he sell it?
What we went over was the concept of being a landlord and especially being an out of state landlord.
The most important thing if you’re going to be an out of state landlord is to have someone as your go to boots on the ground. Someone who can handle any little issues that come up as far as things like unclogging toilets, fixing lights, drywall help, etc. You really just want someone who’s reliable that you can count on to go get something done or to go scope out the property, if necessary.
Property Management Group
For sure, one of the most important things to have is someone to provide boots on the ground. However, if you don’t have access to that, you can use a property management company. What using one of these companies includes is that they’re going to handle a lot of things that you could have to do as a landlord. They will handle the calls, the turnover, the repairs, and they usually have a certain dollar amount that if the repairs go over, they would discuss with you first.
In general, they’re going to handle most of the day to day things. As awesome as that is, they will cost you some money for all the time and management that they provide. Most property management firms are going to cost about 10% of the rent and they’ll usually take a finder’s fee for finding your next tenants.
So some things to consider is how much margin do you want to make and how much time investment can you make in the property. If you can build that cost into your profits, then it will take a lot off your plate, which makes the property management group an interesting option.
Creative Financing Options
After our discussion, this future landlord decided that being a landlord wasn’t the route that he wanted to take. What I told him was that if what was intriguing to him was the money in his mailbox every month, then there are some options where he can sell his house to me and still collect that monthly money in his mailbox without any hassle or repairs.
If he never wants to think about this property again but still profit off of his investment over time, we talked about what those options can look like. This option worked for him, but it is something that needs to work for you. Every situation is unique.
If that sounds like something that you would be interested in rather than worrying about having to rent out your property, then reach out to me below and we can go over some creative options that will provide you mailbox money every month.
In conclusion, renting your property, especially if you are moving out of state or if you inherited a property a distance away, can be a terrific option if you are willing to dedicate the time or have someone take that off your hands through either boots on the ground or a property management company. However, if you are just looking for the passive revenue, then there are a multitude of options that you can pursue. Reach out to me below and we can talk through your specific situation to see what your best options might be.