What to Expect When Renting Your Primary Residence

 Renting Out Your Home: Costs To Expect

Are you considering turning your primary residence into a rental property? If so, it's important to understand the potential costs associated with this decision. There are some potential costs you should be aware of, from legal fees to taxes, before renting out your home. At Leaf Management, we understand how daunting this process can be, so we've put together a guide on the costs to expect when you turn your primary residence into a rental property.

Mortgage

When you turn your primary residence into a rental property, you'll need to consider how it will affect your mortgage. If you plan on renting the property out long-term, you may need to look into refinancing your existing mortgage into a rental property loan. These loans typically come with higher interest rates and fees than traditional mortgages, so make sure you understand the associated costs before you refinance. 

Taxes

When you turn your primary residence into a rental property, there are certain tax implications to consider. 
First, the income you earn from your rental property is taxable and must be reported to the IRS. This includes any rent collected, security deposits, pet fees, etc.

Also, any improvements you make to the property may be subject to capital gains taxes. Depending on the improvement, you may be able to write off the cost of the improvement from your taxable income.  

Finally, remember that you may be eligible for certain tax deductions related to your rental property. These include deductions for maintenance and repair costs, interest payments on loans for the purchase or improvement of the property, depreciation of the property, and other expenses related to your rental property. 

Insurance

When you decide to rent your home, you must ensure it's insured against any damages or losses. Most primary residence policies won't cover rental properties, so you must purchase a separate policy or modify your existing one.

At a minimum, you should purchase landlord insurance that covers risks such as tenant damages, lost rental income, and liability. The insurance cost depends on the property's size and location, as well as any additional coverages you may choose to purchase. 

Maintenance and Repairs

When renting out your primary residence, it's important to consider the costs associated with maintaining and repairing the property. Even if you take proactive steps to minimize repair costs, you'll still need to invest some money in regular upkeep and maintenance. 
If you decide to manage the rental, you should have a budget for repairs and maintenance. 

Utilities

When renting out your property, you will also need to consider the cost of utilities. Utility costs include water, electricity, sewer, and garbage collection. Depending on the size of the home, these costs can add up quickly. It is important to check with your local utility company to find out what rates they offer for rental properties. Many utility companies have special rates for rental units lower than residential ones.

Marketing

It is important to market your rental property even though the process is associated with some costs. You'll want to ensure that you reach potential renters cost-effectively and clearly communicate your expectations and the terms of your lease. You should consider a few things when marketing your property: Online listing, signage, networking, and social media.

Conclusion

Before you start renting out your home, it's a good idea to speak to a property management specialist, like Leaf Management, who can help you navigate the process. We have years of experience helping homeowners transition from a primary residence to rental property, so let us take the hassle out of your hands and give you peace of mind! For more information, contact us on our website Leaf Management.

How to Turn Your Rental Into Your Dream Home

 Transforming Your Rental into Your Dream Home: A Step-by-Step Guide

If you're in the process of turning your rental property back into your primary residence, congratulations! It's an exciting time to move back into space with many memories. However, the transition can also be overwhelming as you navigate the necessary maintenance, repairs, and improvements to make your home feel like new again.

Here is a step-by-step guide to help you successfully transform your rental property into your dream home:

1. Assess the property's condition: Before you move in, it's important to take a thorough look at the state of the property. Make a list of any repairs or maintenance tasks that need to be completed before you can move in. This could include fixing any broken appliances, repairing damage to the walls or floors, and updating the plumbing and electrical systems.
2. Make any necessary repairs and improvements: Once you have a list of repairs and improvements that need to be made, it's time to start tackling them one by one. If you're handy and comfortable making repairs, this could be an excellent opportunity to save money. If not, consider hiring a professional to ensure the work is completed safely and to a high standard.
3. Reapply for the proper homestead exemptions and insurance coverage: If you previously received homestead exemptions or insurance coverage as a rental property owner, you'll need to reapply for these benefits as a primary residence. This typically involves filling out new forms and providing proof of ownership and occupancy.
4. Clean and declutter: Once the repairs and improvements are complete, it's time to focus on making your home feel like your own. This includes giving the property a thorough cleaning and decluttering to get rid of any unwanted items. Consider hiring a professional cleaning service to help with this task if you need more time or energy to do it yourself.
5. Personalize your space: Finally, it's time to put your stamp on the property. This could involve painting the walls, updating the flooring or fixtures, and adding personal touches to decor and furniture.

Conclusion 

Turning your rental property back into your primary residence is an exciting opportunity to create a space that feels like home. By following these steps and taking the time to assess the property's condition, make necessary repairs and improvements, and personalize your space, you can transform your rental into your dream home.