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For some people, relocating to another job can mean leaving behind their home that they can’t sell with present market conditions. This is causing many homeowners to contemplate getting into the rental property business. There are tax advantages to this, which is the primary reason investors will get into it, but for the average homeowner that is faced with a transfer, having income to help with the house payment can be the primary reason they first consider renting out their home.

 With the existing homeowner credit possibly making it more attractive to take this option, there are a few tax benefits you need to be aware of. You can write off interest, property taxes and insurance, but you also get the additional bonus of depreciation, which can give you a bonus, when it comes to income tax time. This bonus costs you nothing, but you have to consider that your gain at resale time will be based on the depreciated cost. Getting into the rental property business reluctantly is how some investors have become more involved and if you get a great deal on a home, it is a great way to realize a profit when it is time to sell.

 This is not a business for the weak of heart because you can have maintenance problems, rent collection issues and other things to consider. Careful screening of renters can help alleviate some problems, but your renter could lose their job and become unable to pay or their living situations might change, which could change the transaction you thought you were getting into. You need to be prepared to make the payments in the event your tenant can’t because it can take a couple months to get a problem renter out, maybe longer in some areas.

 The other thing you have to consider is the work you will need to do to get the house ready to re-rent or sell. You might be faced with re-painting and putting new carpet in, so these are expenses you should consider, but a security deposit can help alleviate some of the blow. Most landlords will get first and last month rent in advance, in addition to the security deposit, so if you start to have problems collecting rent, you will need to be prepared to move quickly on eviction solutions.

 Some homeowners that are getting transferred to another location for their job will hire a property manager and most real estate agents will offer this service for a percent of the monthly rent. Sometimes, it can be worthwhile to know that there is somebody there to take care of rent collections, maintenance problems and keep an eye on your property.

 There are tax advantages that can be quite attractive, when it comes to renting out your home or buying a rental property. Since interest rates are still low and housing prices are lower than they have been in years, it is a great time to consider buying rental property or renting out your home and taking advantage of possible tax credits that appear on the horizon.

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