A lease is a great way to control a house for an extended period of time without paying the mortgage yourself. The tenant pays a monthly rent, which the homeowner usually is using to pay the monthly mortgage.
If rent is higher than the mortgage than the house owner gets positive cash flow.
Leasing has the disadvantage that the tenant may stop paying rent, which may put the house owner in a tough situation of having to pay the monthly mortgage without the rental income. The tenant may be late in making payment, and may also cause significant damage to the house that has to be repaired before renting again or selling the property.
Most people don’t want to be landlords, or run the risk of having to make multiple mortgages without adequate rental income. Most house owners tha need to sell end up leasing.
If leasing is something you are considering, consider hiring a full-time property manager. We only recommend leasing to house owners that aren’t quite ready to sell and are prepared to lose money on the property in the short term. Give us a call and we can recommend one of our great property managers.
What should I know about leasing?
The list of tax, cashflow, liability, and other issues surrounding leasing a home are extensive. For a more detailed understanding of these issues, contact us and we’ll put you in touch with our affiliated property manager.