If you're planning a move in the future you may be wondering whether you should sell your house or rent it out for extra income. When you look at the numbers, it may seem like a good idea to rent out the home and let the tenant pay the mortgage for you. Like most things in life, however, while this looks all fine and dandy on paper, it doesn't always work out that way in reality.
Being a landlord is a hassle
If you just have one property that you'll be letting out it may not be financially feasible to hire a property manager to watch it for you. This means that you're going to have to act as a landlord and take on all of the responsibilities that a property manager would have as well. While most of the time things go smoothly, there are some major catastrophes that can happen and they can end up costing you thousands of dollars. You could even end up losing your entire home!
The worst-case scenario would be that you take in a tenant and he turns the house upside down through neglect. You try to evict him but it needs to be done legally through the court system and months go by until he is given the boot. You can always take the tenant to court to pay for the damages but sometimes these renters will disappear or sometimes they just won't have the funds available to pay for the major damages that occurred.
You'll need to watch the house
You have to keep a close eye on the house if you're renting it out and don't have anyone that can help you out with it. If you're moving to another province and will only get back to see your home once a year, there is a chance that something will go desperately wrong. You could even end up renting your place out to a tenant that intends to use your home as a grow op!
It's hard to find good tenants
They are out there, that's for sure, but it's hard to hold onto them for long. Good tenants are often the type of people that are putting away their hard-earned money to buy a house in the future. It's hard to find good tenants that plan on staying in a certain rental unit for an extended period of time. When you only have one house that you're renting out, you'll need to make sure that it's always occupied so that the mortgage is covered and you must have good tenants that always pay their rent on time.
It's a lot easier to just sell your home unless you are in a position where you can hire a property manager. When you're squeezing the numbers to find out whether selling or renting out your place would be better, factor in the cost of hiring a property manager unless you are fully prepared to be one yourself.