Two Home Families Keeping The Old Home And Buying New

Two Home Families Keeping The Old Home And Buying New

 Keeping in mind that all real estate is local and subject to trends, the economy and demographics.  Generally most area real estate markets are recovering and improving.  However, there is one basic obstical and that is many new home buyers are opting to keep their current home, becoming a two home family which in turn creates fewer homes for sale ultimately driving up demand.

Becoming A Landlord

Many new home buyers that do not need to sell their current home are choosing to keep their old home and become landlords.  The housing and financial crisis, now in our rear view mirror with recovery underway has created an increased demand for rental properties.  Increasing the demand for rental housing is the fact that new home buyers not needing the equity in their current home are opting not to sell and rent them out instead.  Thus reducing available inventory and raising prices because of increased demand, pushing many new first time home buyers in the direction of rentals which also increases rental prices. It's almost the perfect scenario for homeowners able to turn landlords, increasing rental rates and therefore equity.

Advantages Of Being A Landlord

First let me say that I am not a tax accountant and one should always be consulted before moving forward with anything of this nature.  However, there are advantages to being a landlord.  Renting or leasing out your home now becomes a business and as a business, all those repairs, taxes, insurance, utilities and other fees may well be tax deductible.  The other side of that coin is that rent monies collected now counts as income, so you will need to keep proper records and above all: consult with a qualified tax accountant. 

Current Home Underwater?

Another advantage to becoming a landlord is if your current home is underwater.  Renting it out provides an opportunity to build or recover some lost equity, hopefully bringing any financial loss because of the market crisis back under balance and possibly the addition of positive cash flow.  If you don't have to sell your home this could be a great option to selling and taking the proverbial beating!

There Are Disadvantages And Emotional Costs

Homeowners who have lived in the home and are emotionally attached may have difficulties making the homeowner to landlord transition.  After-all, it was (is) their home and having to paint over favorite wall paper or making the switch to a more neutral color scheme could be problematic.  And then there is the possibility of damage and what repairs may cost.  Another potential for worry is the prospect of going months without a renter and the burden of two mortgages.

Probably the best option is hiring a property manager that will provide you with competitive rental amounts that will cover your mortgage and anticipated repairs, etc.  Another great reason to enlist the service of a professional property manager is that they work between the homeowner and renter,  giving you and the renter a nice professional buffer.  Your home will be well taken care of providing some peace of mind.  As your real estate professional I am very adept at helping with the purchase and sale of homes and if need be I also can recommend a great property management team.  Call or email me anytime if you have questions or want help with your real estate, sale, purchase or lease.

Image courtesy: Stuart Miles/freedigitalphotos.net
Content originally adapted from....http://nicktpappas.com/?p=2353 

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