If you want to keep the property so that you can benefit from tax advantages and capital appreciation but wish to offset the expense of the property then you should consider renting the property. This article looks at some of the advantages and disadvantages of renting out your property.



As you will legally own the property you will be responsible for covering all of the costs associated with ownership, including the mortgage, taxes and insurance. You will also be obligated to pay or carry out repairs around the property which were caused by general wear and tear. Even if you have not entered into a contract saying that it is your responsibility to repair the property, your renters will no doubt use this as an excuse not to pay their rent. It's not a good idea to encourage angry tenants.

You should get all prospective tenants to fill out a thorough application form, this should be constructed so that you can get all of the information your require to do a background check.

Make sure you check the credit history of the applicant. Note down any history of late payments. Check out their employment, it's also a good idea to talk to their previous landlords. Construct a fair, well balanced contract which clearly spells out the responsibilities and rights of both parties.

The contract should be easy to understand, so don't use any technical jargon. Also make sure that it's fair to both parties. State how much deposit is needed, and how much notice needs to be given for inspections by the landlord. It's also a very good idea to say who is responsible for specific types of maintenance.

The dates of payment should be accurately recorded. Whenever the payment is late you should find out why this is. A delay of just a few days shouldn't be any problem. Everybody experienced unexpected expenses at some time. However if your tenant is always late paying then perhaps you need to talk to them about it. Discuss this with them as professionally as possible. Show them that you can legally charge a late fee, and try to encourage them to pay on time in the future.

When the property is being rented, it's a good idea to ask the neighbors how they think the tenants are behaving. Do it in a friendly way, not one which will cause suspicion. You are not asking if they are friends, you're only interested to find out whether they are being a good neighbor. They should be tidying up any trash, and should not be creating excessive noise. If any form of legal action is required then it's a good idea to go down the route of arbitration.

It's important that you do all of your homework both before and after renting the property. This will make sure that your investment is protected as much as possible.