Consider these pros and cons before converting your home into a rental.

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Should you convert your home into an investment property? Here are four reasons why this may make sense and four reasons why it may not (i.e., you’re better off selling).

Why you shouldn't:

1. Your mindset around being a landlord is negative. In other words, you’re concerned or uncomfortable with the concept and you’re worried about getting in contact with contractors when something goes wrong. I challenge you on this, though—I think there are great management companies out there that can help you with this kind of thing, so this is an easy issue to address.

2. The property is far from where you’re living next. Perhaps the distance between that home and your new one makes you uncomfortable. A rental property is a lot to manage from a distance. Again, though, a management company can help you with this.

3. The property doesn’t have enough equity. If that’s the case, refinancing the property and pulling cash out of it isn’t a smart move.

4. The numbers don’t make sense. It’s possible that the rental market just isn’t there to support this type of move, even in a break-even or positive cash flow situation. Perhaps the HOA fees or taxes are too high.

”If owning a rental property interests you, give me a call so I can help you evaluate your situation and determine the next best step.”

Why you should:

1. It’s the easiest way to become a real estate investor. Let’s face it: Converting a property you already own into a rental property isn’t that hard to do. It’s already financed, so this is a great way to enter the market as an investor. I did this for my first couple of homes, and I’m so glad I did. It made a huge difference long term.

2. You’ll have more flexibility when transitioning to your new home. Selling your current home and buying a new one involves a lot of moving parts; renting that home out offers you more flexibility in that you have more control over the timing of everything.

3. Primary residences have more attractive interest rates (as opposed to investor rates). Again, this is a great way to enter the real estate investing game, and you’ll get more cash flow than you would otherwise.

4. It’s the best way to build long-term wealth and passive income. You can also take advantage of certain tax benefits. Of course, I always advise you to talk to your CPA about these benefits first.

Before you make a final decision, keep in mind that rents are very attractive in our market from a landlord’s perspective. If owning a rental property interests you, give me a call so I can help you evaluate your situation and determine the next best step. If you have any other real estate questions, feel free to reach out to me as well. I’d love to hear from you.