Renting your house in North Park can be easy if you are the owner of the home. However, are you ready to do this? Are you ready to be a landlord? There are certain things to consider if you are planning to turn your home into a rental. Here are a few tips that will help you decide whether this is the best thing for you to do.
Are You Hiring a Property Manager?
Will you be the one responsible for finding the tenant, running the credit check, checking their references, etc.? Will you be the one they call when something goes wrong with the plumbing, electric, roof, etc.? Do you have a handyman, electrician, roofer, plumber and these types of tradesman ready to tend to you if you get one of these distressed calls from your tenant. Having a relationship with these people is very important. Especially when you need them in a hurry.
Will You Have Enough Cash Reserves for Maintenance and Repairs?
If you own a home in North Park, South Park or any of the Metro neighborhoods in San Diego, it is most likely you have a one-hundred-year-old house or close to it. Even if it is somewhat upgraded, it most likely has older plumbing and some older electric just to name a few things. You will need to have a rainy day bucket for this. It is not “if things break” but more like “when things break.” You should plan on having an account with at least $3,000-$5,000 dollars in it for emergencies.
Create Home Rules for the Renter
Rules are very important to have. This should be in writing and signed by the tenants at the time they are signing the lease. This brings me to the lease part. Make sure you have a written lease. There are many places to pick one up but if you are in San Diego, you should have one that is specifically for Southern California. You can pick them up at any Staples or take a look at https://wikidownload.com/wiki/california-rental-lease-agreement-forms-templates. Everything should be in writing. If you want something to happen or not happen then you better put it in black and white. Otherwise, a year later it will be like it was never agreed upon.
Will You Live Local or Out of State?
If you are going to live local while you are renting your home, this may be a little easier to do yourself. If you are going to be out of State, this may be a bit more challenging to do since you won’t be around to check on how your investment is doing with a simple driveby at least. Remember, this is no longer your home sweet home. This is a true investment and you will want to make sure that it is being maintained so that your investment continues to grow.
What are the Benefits of Selling a Home While you have Lived in the House 2 out of 5 Years?
Everything has gone well with your rental but you are realizing that the Real Estate Market is doing well. You heard about this thing called “Capital Gains”. Is it getting close to that time where you will have to pay capital gains if you don’t sell now? Take a look at the rules on the IRS website. It will give you an idea of where you stand. The best thing to do is to speak to your certified public accountant about this. Find out what are the taxes and capital gains on the house if you make money on the sale. Not knowing what this is about can cost you thousands of dollars.
Selling a home while a tenant is living in it
So you decided that you are done with being a landlord and you would like to sell the home while the tenant is still living there and paying rent. You may think that you will save money this way. In reality, it will cost you a lot more by doing this. Think about it; the tenant is not happy that you are not renewing the lease and now they have to look for another place to move to. They are not motivated to keep the home tidy and in mint condition for showing. Nor are they happy to let strangers into their space while they are not home. They also do not want to have to leave if they are home while we are having a showing or wanting to give us permission to do an open house. You, the seller will ultimately receive a lot less in proceeds if you choose to keep the tenant in the house while you put it on the market for sale. This, of course, stands true if it is a single-family house. If it is a multi-family house, different rules apply. The buyer of a multi-unit house may want to have the tenants in place if the rents are good and the tenants are all paying their rent on time.
Work With a Local Experienced Realtor
Stay tuned with the local realtor in the area. Are you receiving marketing pieces from a local realtor showing their sales in the area? Are they keeping you informed? If you have been using a property manager to manage your rental, this is not always the best choice for selling. These are two completely different aspects of the Real Estate Business. Do your homework first. Google North Park Real Estate San Diego. Find out who is selling most of the homes in the area. Go on their website, yelp and google reviews to see what people are saying about the experience of working with them are. Have a conversation with them and you will immediately know if you make a good fit to sell your home in North Park.
If you have any questions about buying a home or selling a home in North Park, South Park or any other metro area of San Diego, contact the McT Real Estate Group at (619) 736-7003. We are happy to speak with you.