CAN YOU RENT YOUR HOME WHEN YOU TRAVEL?
Do you travel a lot for leisure or business? If it’s often in a year, for a long duration of about weeks to months, you can rent your home when you travel – making you money for your travels. It is important to plan well before making this decision. Here are some advantages and cons to consider.
ADVANTAGES OF RENTING OUT YOUR HOME
- Passive Income
Earning passive income is highly advantageous. This form of income has grown increasingly common. The extra money can help you sort out other expenses. For instance, the funds can be used to plan your escapades, it can be added to a business venture, or to improve your lifestyle.
If you have current mortgage payments on your home, renting it when out on travels will help you pay off the loan. The amount received will significantly ease the immediate mortgage payments.
CONS OF RENTING OUT YOUR HOME
- Building Rules
Rules are fundamental while renting out for a while when on travel. This rule building exercise takes a lot of time and energy to ensure they work well with those renting it. Having to put notes for reminders like no wet mats on the wooden floor. Plus typing out a list of precautions to take, like, flushing diapers is wrong or protecting your furniture have to be adhered to fully. Hence, renting out your home will be baseless if it creates more expenses than when vacant when rules are broken.
- Financial obligation
It is important to have realistic expectations of the hassle of renting your place out. Also, you need to consider the fact that the venture may not be as lucrative. In some cases, the mortgage, insurance and property tax makes it less profitable to rent the home. You may need to re-mortgage before setting up the rental.
- Tenant Management
Having someone taking care of the property for you is vital. It can be someone who doubles up as a caretaker and does minor repairs. They can be a walk-through person who orientates on everything in the house to the renters. This person eventually counts as an expense, and, therefore, reduces the income you get from the renters.
Renting out your home while on travel can raise your taxes. Since the house is being leased out, the income received is taxed as part of your income. Therefore, it becomes a liability to you as the landlord for the period it’s rented out. After all, it has to be listed as Self-Assessment tax return while filing taxes of the current year.
Renting out a home is excellent due to the passive income and quick mortgage repayment. However, there are various factors you need to consider before renting it out. The listing above summarizes this scrutiny.