When renting out any property, it’s common to have concerns about ensuring the rental process runs smoothly. This is especially true when you’re renting out your primary residence, since there is more emotional attachment when the property is your home. Considering the implications of converting your primary residence into a rental property is important to help you determine whether it aligns with your financial goals and personal circumstances. There are both pros and cons to renting out your primary residence, so determining whether it’s the right move for you will depend on your specific situation and goals.
The Pros of Renting out Your Primary Residence
Additional Income
The biggest benefit of renting out your home is the additional income you can generate. Renting out your primary residence can provide a valuable source of supplemental income, helping you offset mortgage costs, property taxes, and maintenance expenses. Purchasing a property to be your primary residence is generally done with the goal of it being your home for the long-term future. Renting it out can be a great way to cover the costs of home ownership, while continuing to build equity over time.
Property Appreciation
As your primary residence is a long-term investment, renting it out allows you to generate income during the time that you own the property. Over time, this strategy allows you to benefit from any potential appreciation in property value over time, which can result in long-term financial gains when you decide to sell the property. Essentially, renting out your primary residence makes it a self-sustaining financial asset and gives you the option to sell it once it’s appreciated in value without having incurred the costs of ownership over the years.
Flexibility
Renting out your primary residence allows you to maintain ownership of the property while giving you the flexibility to move to a new location without the immediate pressure to sell, providing you with a backup plan in case you need to relocate. Having a property that you can fall back on if your situation changes is a huge asset, especially if it’s being rented out and can generate income in the meanwhile. You can always make it your home again in the future too, which is something you could plan for as part of your 5 or 10 year plan.
The Cons of Renting Out Your Primary Residence
Responsibility and Management
When you rent out your property, you become responsible for creating a livable and safe environment for your tenants. Being a landlord means being responsible for property maintenance, dealing with tenant issues, and ensuring legal compliance. The many responsibilities of a landlord can be time-consuming and costly to manage if not efficiently handled. It can be especially difficult if you don’t live in the same area as your property.
Many landlords choose to enlist the help of a property manager to ensure the rental process runs smoothly. A property manager can take the pressure off by being your eyes and ears and managing the many issues that may arise. By having a trusted property manager that you can rely on, it can help assuage your fears by knowing your home is in good hands.
Wear and Tear
One of the common issues that arises with rental properties is property damage. If not properly taken care of, the rental of your primary residence can lead to accelerated wear and tear, which results in increased maintenance costs and the need for more frequent repairs and renovations. This is where a proactive approach is key.
Regular inspections allow you to identify any potential issues before they arise, and proactive maintenance will help keep your property in good condition. It can be difficult to stay on top of all the required maintenance and inspection duties, so many property owners will opt to delegate this task to a property manager. They will help ensure that your property is being well-maintained and can also arrange for any repairs should the need arise.
Tenant Risks
One of the most important tasks when renting out your primary residence is screening potential tenants to help you choose the best possible tenants to rent your home to. Having a thorough screening process can help you weed out unqualified tenants that could potentially pose a risk later down the road. Dealing with problematic tenants, late payments, or potential property damage are some of the most stressful situations for landlords, and can potentially lead to financial and legal implications.
It’s crucial that you have a thorough understanding of the Residential Tenancies Act (RTA) to ensure that all situations with your tenants are handled in the correct manner and in accordance with the law. Having a dedicated property manager on your team can help you navigate tenant relationships with ease, while also providing your tenants with a trusted point of contact for any complaints or concerns.
Renting Out Your Primary Residence With DORE Property Management
Now that you’ve had a chance to weigh the pros and cons, you can make an informed decision about whether to go ahead with renting out your primary residence. By taking the right approach and planning properly, you can set yourself up for a stress-free, successful rental experience.
DORE has helped countless homeowners rent out their properties with peace of mind. Our experienced team is here to support you by making the rental process seamless. From thorough tenant screening, to proactive property maintenance and legal compliance, you can count on us to rent your precious primary residence with ease. Get a quote on our property management services to get started!