Home leasing.
Sell or Lease Your Home?

Home leasing is usually an option for a home owner, provided, of course, prevailing circumstances support a decision to commit to this path.

Obviously, you must leave behind at least a portion of your equity. So, if you can pull enough out of it to invest in your next home, or you don't plan to buy another home in the foreseeable future, then it may make sense for you to maintain your old home as an investment.

If you want your investment to be revenue neutral, so that you're not generating positive income to be taxed, nor creating a monthly deficit, your equity must be sufficient to ensure that the rent covers the payments for the mortgage, property taxes, regular maintenance and repairs.

If you're moving to another city, or even out of the country for a limited time, you may want to limit your home leasing to the length of time you plan to be away. That way, you can return home afterward. Make sure the lease includes a clause that terminates the lease prior to your return. You'll also need to make arrangements for someone to manage the property and collect the rent cheques in your absence.

If you're not moving away, but still want to keep it as an investment ...

Think Long Term

Real estate markets have traditionally supported long term (and sometimes short term) investment because market values have historically moved up over time. Properly structured, rental income can literally pay off your mortgage for you. However, if you're in a declining market, it may not make sense to keep it. Would you keep a corporate stock or bond if its value was declining?

Remember that being a real estate investor usually means being a landlord too. And being a landlord isn't always pleasant. Tenants can be troubling. And they can destroy your beloved home.

So, if you're asking yourself the question, 'What's involved in renting my house?', you may want to click this home leasing link to learn more about the pros and cons of home leasing.

And to learn more about being a landlord, click here.

If you're in Ontario, you may want to learn more about landlord and tenant rights and responsibilities under the Ontario Residential Tenancies Act by clicking here.

There will be similar legislation wherever you are in the civilized world.

Return to Home Page