Keeping Your First Home As a Rental Property

When you are ready to trade up to your second home, it is worth considering the idea of keeping your first home as an investment property which you can rent out. Of course, this is not always financially possible, depending on how much equity you have in the house and how much you are going to spend for your next home, but it is definitely worth sitting down and doing the figures before you dismiss the idea.

There are several factors to consider when you are deciding if keeping your first home as an investment rental property is a good idea. First up, you should check whether it is the kind of property that will rent easily and to good tenants. If not, then you may as well use your equity to invest in a more suitable property, but remember that buying and selling all costs money, so you may not necessarily end up better off.

You should also consider whether there are renovations or improvements needed before the property can be rented out, and how much these will cost. However, if you plan to sell the home instead, it is often advisable to make minor improvements anyway, so you may end up doing them anyway.

Finally, make an estimate of the incomings and outgoings for the home if you turn it into a rental property. Get an up-to-date estimate of the amount of rent you should be able to charge, and check your own records to see additional costs such as annual rates and maintenance costs. If the figures add up, then go for it.