Purchasing a fix and flip property is often a long-term investment. You'll have your capital tied up in the house for quite some time. Sometimes, when the work is done, you're faced with a problem: you've got the property fixed up, ready to sell, but it's sitting on the market without selling. In other cases, you might have watched the market shift in your area so that you can't make as much on the property as you initially thought. If you encounter a problem, is it worth renting your investment property short-term? Asking yourself a few key questions will help make this determination.
Question #1: Can you secure a renter who will take care of the property?
You've put a lot of effort into fixing up this property--not to mention the money you've put into it. If you're going to rent it out, you want to be sure that it's in a good area where you're most likely to find renters who will take care of the property. There's nothing worse than renting it out to someone, only to find a couple of months later that they've destroyed much of the work that you put into the property.
Question #2: How long do you plan to rent the property?
It's rare for renters--especially good renters--to be interested in a contract of less than a year. When you commit to renting your property, it's a long-term commitment. If you expect the property to sell any day--you've had several offers, for example, and are just waiting for financing to come through--it's not time to put in renters. If, on the other hand, you're starting to wonder if the house will ever sell, renting it is a great way to help offset that cost.
Question #3: What are the benefits to having people renting the property?
In many neighborhoods, having someone inhabiting the property will offer a number of benefits. This could include:
Deterring thieves and vandals
Having someone on-site to let you know if there's a problem
A resident who will keep the heat running in winter (no frozen pipes!) and take care of lawn maintenance during the summer
Then, of course, there's the income that you'll receive from renting the property, which could help offset the cost of the loan that you will, unfortunately, have to keep paying until you're able to sell the property. For many investors, these benefits will far outweigh the inconvenience of a renter.
If you're struggling to sell your investment property, having a renter is a great way to help offset some of those costs. Who knows? You might even find that you like being a landlord! If you need help securing financing for those efforts, contact us today to learn how we can help.