Yes, you can rent your home.
How much will you make? Well... it depends.
If you are looking for enough cash flow to retire tomorrow, send your kids to college, buy your forever home and put that dream car in your 4 car garage then we need to have a different discussion.
However, if you're needing to move for a job, need a fresh start, plan to move back eventually or whatever the case might be then your mindset should be "Ok, someone else will pay this for me.”
Renting your home can be a great way of creating passive income but again it may not be significant. This shouldn't scare you though, because the home value is where you should be focused.
Average Rent in the DFW is about $1,150 with over 90% of rentals being less than $2,000 per month. Added note, 74% are below $1,500. https://www.rentcafe.com/average-rent…
With the median home sale price in the DFW at $237,800 then your average monthly PITI (Principal, Interest, Taxes, and Insurance) will be around $1,900 a month with a 30 year mortgage at 5% interest with $20,000 down payment. https://www.zillow.com/dallas-fort-wo…
So in optimal conditions, $1,900 per month payment, $2,000 a month for rent, your net cashflow is $100 per month. AWESOME! Hardly puts you in Forbes though. So why would you rent?
Consider in the above example your tenant stays for 2 years.
12 months at $2,000 = $24,000 2 years = $48,000 You have effectively made over a 100% return on your initial investment (down payment of 20k) in just the first lease. With home values expected to rise an additional 8.4% moving into next year you could refinance the home with the current equity, increase your monthly cash flow and eventually sell the home for a profit while someone else was paying the mortgage all along.
Single family rentals are a long term investment and because the housing market has always shown to correct itself after downturns, many times this is a very safe investment.
I know this is a VERY basic example but this is in a nutshell how to profit on renting a home.
Give us a call to learn more!
Alex Cholet
Team Lead - DFW Flat Fee Landlord
(469) 703-8139
