Whether you are relocating for a new job, traveling overseas for an extended period, or owning a second home, there are plenty of reasons you might consider renting out your home. Having a rental property is a great way to make some extra income. However, there are pros and cons that you need to weigh up before you get started.
If this is your first time renting out a property, it’s important that you consider the costs of renting out your property first. For example, you might need to hire Melbourne property managers to look after the property on your behalf. You will need to deal with repairs as they arise. Of course, you will need to communicate with your tenants about various issues over time. Taking all of these points and more into consideration will help you decide whether or not renting out your property is the right decision moving forward.
Let’s take a look at a few things you need to consider when deciding if you should rent out your property.
Consider The Demand
The first thing that you will need to do is to see if there is demand for your type of property in the local rental market. Doing some research will help you determine if there is enough demand for your property and the rental rates you will likely charge. It’s important to focus on your specific property type when making your decision. If there is a demand for two-bedroom apartments and you have a four-bedroom house, you might not be able to rent out your property easily.
Emotional Attachment
Many homeowners are very much attached to their properties, and the idea of someone else living there is something they simply can’t handle. If you fall into this category, then renting might not be the best option for you. Take some time to weigh up the pros and cons, as well as the financial benefits of renting your place, to help you determine just how attached you really are to your home.
Responsibilities Of Being A Landlord
Becoming a landlord is a big undertaking and a decision that should not be taken lightly. If you make the decision to rent out your home, you are essentially starting a small business, and, as such, you will need to take on the associated responsibilities. If you have looked after your home well and get good tenants, things should go smoothly; however, this is not always guaranteed. If you’re going to rent, make sure that you have a good understanding of the responsibilities you are taking on before you get started.
Think About Taxes
When you turn your property into a rental, there are countless tax considerations that can impact you. For this reason, it’s crucial that you seek out solid financial advice before you commit to becoming a landlord and renting out your property. For example, proper tax planning can help you to maximize your allowable deductions and minimize your tax liability. You will also need to be sure that you take steps to protect your property’s capital gains tax exemption moving forward. Before you decide whether r not to rent, make sure that you have considered the tax implications of your decision so you don’t find yourself in trouble with the ATO.
Take Some Time To Consider Your Options And Make The Right Decision
Deciding whether or not to put your property on the rental market is not something to be taken lightly. Take the tips outlined above and do your due diligence before you make your final decision. Taking the time to consider your options will help to ensure that you make the right call for you and your property moving forward.
