Homeowner turned landlord
Posted on Wednesday, January 11, 2012 at 9:19:44 AM
Homeowners moving away from a city or looking to develop an investment should consider transforming a property into a rental unit. After obtaining residential financing to renovate the property, the owner will likely have very little trouble finding a tenant.
Apartment vacancies have fallen to 5.2 percent across the nation - while rents have climbed to $1,009 a month, according to Bloomberg. A homeowner looking to take advantage of this perfect storm should consider a home mortgage comparison to refinance.
"Some homeowners can refinance to a lower interest rate and lower their mortgage payments and then charge a market rent that gives them positive cash flow each month," Nick Pasquini, broker-owner of Century 21 Redwood Realty told Washington Times.
Once the decision to refinance and turn the property into a rental, the homeowner must research local jurisdiction that may apply. Rental properties can be required to perform more testing than traditional homes, show paperwork, file for assessments and be considered in a different financial classification than a primary residence.
Renting a property out can prove to be fiscally beneficial for the property owner if done correctly.