To rent or not to rent; that is the ques­tion

The Progress-Index - At Home - - FRONT PAGE - By Shanna Wise­man * Shanna Wise­man has been a li­censed real es­tate agent since 1997 and prop­erty man­ager for Parr & Aber­nathy Realty Inc. since 2000. She was the pres­i­dent of the South­side Vir­ginia As­so­ci­a­tion of Real­tors in 2008 and cur­rently serves on

With the ups and downs of the res­i­den­tial re­sale mar­ket over the past five years, sell­ers have fre­quently been faced with the ques­tion of what to do with their home if it will not sell. Many have opted to re­main in the home and weather out the storm. Oth­ers, some by choice most out of ne­ces­sity, have been forced to be­come “un­in­tended land­lords.” As a pro­fes­sional prop­erty man­ager I have al­ways felt it my duty to make sure when peo­ple are try­ing to de­ter­mine if they should rent their home out or not, they fully un­der­stand some of the po­ten­tial short and long term con­se­quences. Here are few tips to keep in mind when mak­ing an in­formed de­ci­sion.

Be aware of the le­gal re­spon­si­bil­i­ties. Vir­ginia Law re­quires land­lords to abide by and re­quired to main­tain the prop­erty re­gard­less if you are the occupant or not. There are state and fed­eral Fair Hous­ing laws that gov­ern and pro­tect con­sumers; as well as the le­gal sys­tem that pro­tects both ten­ants and land­lords in the event of a dis­pute.

Be fi­nan­cially con­scious. Know that the fair rental rate on the house of­ten will not be what your mort­gage pay­ment is. There is a pos­si­bil­ity of a con­sid­er­able gap. You need to be aware that there will come a time for a main­te­nance mat­ter or re­pair that could arise at any time. It could come up the day af­ter you move out or six months down the road. Th­ese re­pairs could be min­i­mal all the way to re­plac­ing an HVAC sys­tem. You will have to be mind­ful that th­ese items could come up and it would be your re­spon­si­bil­ity to re­pair or re­place. Just be as fi­nan­cially pre­pared as pos­si­ble. Be ready for a va­cancy or delin­quency on a rental pay­ment by a ten­ant; and how you plan on mak­ing the mort­gage pay­ment dur­ing th­ese times. Consult with a tax ad­vi­sor re­gard­ing po­ten­tial tax im­pli­ca­tions on the rental in­come you will have to claim and the al­low­able de­duc­tions. There are cer­tain tax laws re­gard­ing items like Cap­i­tal Gains and changes in tax brack­ets you need to be fully aware of.

Be re­al­is­tic. It is im­por­tant to know that noth­ing is one hun­dred per­cent guar­an­teed. You may find a ten­ant who does ex­actly what is re­quired of them to have an ideal rental sit­u­a­tion or you could have a bad last­ing ex­pe­ri­ence. As stated be­fore, re­pairs could come up ev­ery day or once in a blue moon. You could be suc­cess­ful in never hav­ing a va­cancy or the house can sit empty for five months. Th­ese are some of the un­knowns but there are safe­guards you can take to try and en­sure a suc­cess­ful leas­ing ex­pe­ri­ence. Consult with a pro­fes­sional, rep­utable full time prop­erty man­age­ment com­pany. Full time prop­erty man­age­ment com­pa­nies as­sist you in ev­ery­thing I have in­formed you of above and be­yond. They are not at­tor­neys nor tax ad­vi­sors, but if they do not have the an­swer, you will be guided to the proper re­sources .

Af­ter read­ing this col­umn, you may be ask­ing your­self “why in the world would any­one want to be­come a land­lord?” My at­tempts were not to shy you away from the idea; but to help make sure that as you con­sider be­com­ing a land­lord you know what is ex­pected, po­ten­tial hur­dles and to help you make a more in­formed de­ci­sion. Rent­ing out a house is not as easy as throw­ing up a rental sign in the yard and hope all goes well. It is busi­ness de­ci­sion that re­quires both short and long term plan­ning. Re­mem­ber, you con­tacted a real es­tate pro­fes­sional for guid­ance on sell­ing your home, do the same for rent­ing it out.

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