Pro and Cons Homeowner Rentals
Bergen County NJ Real Estate - Home values are currently on rocky waters via the quarter to quarter existing home sale price swings.
Jan 2012 The fed announced that interest rats will remain low until 2013 (Mortgage Interest Rates can vary). As a result of this, BUYERS as well as SELLERS are on the sidelines playing a guessing a game... The guessing game entails questions like...
Buyers - How many foreclosures are there in my town? How many of the foreclosures in my town will convert into 'Short Sale Opportunities?" Does it really take six months to close on a short sale? If the shot sale takes six month, then what will my possible residential home loan interest rate be? Should I wait for more banks to open the floodgates... and release more foreclosure / short sale home sales? The bank is not paying me much interest on my accounts and Europe is not allowing for the U.S. stock market to act un fundamentals... What percent should I put down as a down payment ( LTV loan to value ratio)?
Sellers: Should I sell now or rent my home? The United States has over four million financially pinched homeowners that are reluctant to sell their home at a loss and opting to rent their properties. Some homeowners are becoming accidental landlords because of a job opportunities, which forces them to move before they can sell their home
It's time to figure out your cost of maintaining the property. mortgage payments, insurance and taxes. Compare that number to how much income your are expecting to receive from renting out your place. Would you come out ahead? It's imperative that you look at what comparable homes are renting for.
Finding a reliable tenant is difficut considering the economic downturn that has left some responsible people with blemished credit reports. You want someone who is gainfully employed (have they been at their job at least a few years?), has a good reputation, pays their bills on time, and has a reliable income stream. Never mind your gut instinct: you really have to treat the entire process like a job interview, getting all the relevant information in writing — from former landlord information, personal and professional references.
Other areas to weigh in on your decision are: taxes on the rental incomes, tolerate complaints, repairs and should this be handled by a property management company. You also have to change your insurance into a landlord's insurance policy.