Mortgage Help

For some people, renting their house out can help stave off foreclosure or being forced to sell a home for less than they owe on their mortgage.

While it is difficult at current prices to cover a mortgage payment, maintenance costs, and repairs with a rental payment, a renter can certainly help cut down on the cash you pay each month. One possibility is to rent a room in the house (www.roommates.com can assist you in finding a renter). Alternatively, you could rent the entire house out and find a cheaper place to live.

First, look in your local classified ads to determine what the market rent is for a house similar to yours.

Next, figure out what your expenses are. Expenses include not just your mortgage interest / payment, but also property taxes, homeowners association dues, maintenance costs, repairs, and tenant screening. Also, factor in the fact that your house will be vacant for a period of time if a tenant moves out. If the vacancy rate in your area is 7%, multiplying this by your projected rental payment is a good place to start in forecasting what vacancy risk will cost you.

Tenant screening is very important. One bad tenant can cost you thousands of dollars in damages, eviction expenses, and vacancy expense. Check with the prospective tenants’ previous landlords and a credit reporting agency. You will need to disclose this on your rental application.

Renting a house is a complicated subject, and it is important to research this thoroughly before jumping in. Some resources that may help:

Property Management for Dummies

Every Landlord’s Legal Guide