Money Saving Monday: The benefits of renting out a house

Money saving Monday: Renting out a house

SARASOTA, Fla. (WWSB) -Buying an investment property to rent out could be a good way to make some extra cash.

According the website InvitedHome.com, renting out a house at a beach destination in Florida could make a person up to $125,000 a year. Along with that, the company Earnest said on average, an Airbnb host makes about $924 a month.

If you're interested in buying an investment property, expect to put 20% to 30% down on the house. You also can expect to pay for the mortgage, taxes, and the insurance.

How a homeowner makes their money is through positive cash flow from rent money. The homeowner will also get tax benefits when renting out a house, as well as profit off of the future increase in value on the house through appreciation.

But, before buying an investment property, a person should look into the Homeowners Association rules.

“Unfortunately, we live in a world today where many of the HOAs have restricted the use on a seasonal types of rentals at all. Or in some cases they’ve restricted allowing you to rent the property in the first two years of your home ownership. So you need to be very careful about buying investment real estate for the purposes of renting it whether it’s through an online service or whether it’s through a realtor,” said David Clapp, who is the 2019 President-Elect of The REALTOR Association of Sarasota and Manatee.

The homeowner can chose to rent out their property themselves through a website like Airbnb or have the help of a real estate agent. When it comes to making a decision between the two, a real estate agent will require a fee but they will help manage the tenants and have expertise on pricing, which means they could get a person a better price for the rental. But, it really depends on how much assistance the homeowner wants.

If someone is debating on whether to buy an investment property to rent it out or buy one to flip and resell, Clapp said a person will probably make more money renting the house out. He said along the Suncoast, it’s hard to find a good deal on a fixer upper house, making it harder to make a good profit after the house is repaired and sold.

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