When you own a mortgage on a property that you are currently not using, you may wonder if you can take advantage of your property by renting it out. While this is possible in some circumstances, there are other mortgages that forbid you from renting out your home.
Follow the Rules of Your Mortgage
Check your mortgage documents. For example, if your home is insured by the FHA, you may be required to reside in the home for at least a year. However, you do have the option to reside in a home for a year, rent it out afterward, and find another home. Also, a lender has the right to deny you the right to rent out your home for any reason.
Renting out your first property is not unusual. Many full-time real estate investors begin by renting out their first properties. Then, you can purchase more properties over time. But even if you do not wish to make real estate your main source of income, there are several other reasons why you might want to rent your property. For instance, you may not be able to sell your home, but need to move.
Meet the Insurance Requirements
When renting out your home, you will need to purchase more insurance than what you would normally purchase. For instance, you will need to purchase landlord insurance. Depending on the state or municipality you live in, you may be required to fill out certain tax forms.
Contact your homeowner's insurance policy to inform them that you intend to rent your home. Insurance policies for rental properties are treated differently from homeowner's insurance properties that you will simply live in yourself.
Hire a Property Manager
If you would like to generate revenue from your property, but you do not have the knowledge or desire to manage your property yourself, you have the option of hiring a property management company. Set a rent that is similar to other properties in your area to maximize profit while not scaring away potential renters.
Finding someone to rent your home may not be as difficult as you might think. After the housing crisis, a large number of Americans have continued to prefer renting. While there are several apartments to choose from, many renters prefer to live in a house. In addition to being able to enjoy a yard, houses provide renters with more distance from their neighbors. To learn more, contact a mortgage broker near you.Share
17 February 2018
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