How much money can you make when you’re renting out a house? There are several things to consider if you are deciding whether to rent out your home. You need to look at the dollars and decide if it makes sense.
How to Rent Your House: Cash Flow
First, estimate your monthly cash flow. You’ll need to know if the rent you receive will cover all of your expenses. When you’re calculating expenses, don’t forget to include maintenance on items that may come up.
How to Make Money with Rental Property: Appreciation
Long term appreciation also needs to be considered. Use a conservative number when you’re calculating appreciation so that any surprises will be pleasant ones, and you’ll have good news. Remember that your tenant will be paying your mortgage every month, so your loan balance will be going down. Even if your appreciation is slower than what some of those calculators show you, equity is still growing over the long term.
How to Rent Your House: Tax Benefits
Finally, don’t forget to have a conversation with your CPA or financial professional. You’ll want to know about all the amazing tax benefits that are available with rental properties.
Everyone’s results will be different. Be sure the numbers and risk work for you. If you’re not sure how to figure out your property’s potential performance, talk to a professional. We would be happy to help you.
Rentals are not a get rich quick plan. Slow and steady is the best way to win this race, and you have the potential to build tremendous wealth with your rental property over time. Be patient.