Should I Rent Out My Property Until the Market Gets Better?

Is a question I have gotten a lot from real estate investors. Most are part-time real estate investors that were lured into the real estate world with visions of making easy money. Well we all know how the market has changed, and some properties are taking longer than projected to sell. It is important to look at a few key items to determine if renting out the property makes sense to the property owner.

We will start with the benefits:

1. Rental Income- In most cases, you can rent out the property for enough money to cover the principal, interest, taxes, and insurance payments. Anything left after that is called positive cash-flow. Even if you are breaking even, this is still a much better scenario that paying thousands in payments.

2. Securtiy of the Unit- By having a tenant in the property, the chances of vandalism, vagrants, or even a water pipe breaking decrease significantly.

3. Piece of Mind- By receiving rent money and having the unit occupied, property owners can continue about their lives without worrying about the unit draining their bank account or getting broke into to.

Negative aspects of Renting out a Property:

1. You are a landlord- You will have to find a renter, negotiate a lease, and collect rent payments. You can also pay a property management company a fee to assist with these things.

2. Hard to show Property- If you are going to continue to keep the property on the market, being occupied makes it more difficult to show.

3. Damage to Unit- Even though you receive a security deposit, some renters will leave the unit in need of expensive repairs.

I always explain the pros/cons with clients and let them come to their own conclusion on what to do. I personally do a mix of both and will continue to do so.