Tuesday, January 12, 2016

Turn Your Home into an Income Generator

Life happens. Jobs change, families grow, kids move-out: no matter what the reason, you are at a crossroad where you now have to decide on what to do with the home that you live in. The first reaction is to sell, but have you considered the possibility of turning your home into another source of income? The thought of becoming a landlord is scary to most people, but done correctly, it can bring in an additional $12,000 – 18,000 in yearly passive income for most homeowners.

There are many instances where renting can be a better option than selling. Underwater mortgage? Even 7-8 years after the housing market crash, there are many homeowners that still have mortgage balances higher than what the home is worth. No need to feel “stuck” in your home – you can rent your home to a qualified tenant and have the rent cover your monthly ownership expenses, giving you the freedom to move. On the flip side, maybe you have a lot of equity in your home and life is simply giving you a reason to move on. Renting your current home instead of selling can give you additional income for retirement, paying off debts, or just to have as extra fun money, all while your home continues to appreciate in value.

Extra income and covering ownership costs sounds great, but how do you make sure to get a good tenant who is going to pay rent on time and take good care of the home?  Thorough due-diligence is the best defense against bad tenants. Doing credit checks, criminal background checks, and rental history checks will give you a very good idea of the type of tenant that you are going to be dealing with. Spending a few extra bucks to get detailed credit and background checks done will be well-worth the money and can give insight into how responsible a potential tenant has been in the past. If you are looking for a more hands-off and stress-free approach, it is best to enlist the help of a professional property manager with experience in your area.

THE BIG IDEA: Find freedom and extra income in turning your home into an investment property. Educate yourself, take the time to do proper due-diligence, and enjoy the financial freedom that a rental property can give you!

Lauren Frost
Advanced Property Management, Inc.

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