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Clearly, there are many reasons why you will, at sometime, desire to place your home on the “For Rent” market, or acquire homes for the specific purpose of renting them.

• Your home did not sell within your time frame on the “For Sale” market, and you desire a tenant to minimize your mortgage expense until the market is better.
• You want to retain ownership of the home until future plans are resolved.
• You want to build equity in the property while having your mortgage payments offset by a tenant.
• You want to have an asset, paid for by someone else, for retirement in order to generate additional retirement income.

In addition to having someone else pay for the major portion of a rental home, there are substantial tax savings for the homeowner.

• You can deduct up to $25,000.00 against ordinary income on your combined properties, if you are active in the management of your properties, with certain income restrictions.
• You can depreciate the property on an annual basis and deduct this amount from your taxes. Remember, when you sell the property, it will be subject to capital gains tax and in some cases, recapture.
• You can deduct all repairs and maintenance, insurance, property taxes, and mortgage interest.
• You can do a “like kind exchange”. Remember, you can’t do this with stocks.
• You can deduct the cost of a trip to Jacksonville to inspect or make repairs to the property.

There are always certain risks in renting your property. The most common complaint from the homeowner is-the tenant is not taking care of the property the way you want them to. You must remember that the tenant does not have an emotional attachment to the property. The tenant will be in the home for a short period of time and he/she does not have the “nesting” instinct associated with homeownership.

• The definition of good and excellent condition differs among everyone. No two folks will ever agree. What one person thinks is great housekeeping will be deplorable to another, etc.
• As a property owner, landlord, you must be willing to assume the risks associated with placing your property on the rental market. You will get a good tenant and every now and then, you will get a really bad tenant. You will get a tenant who pays on time and you will get a tenant who pays late. It is important for you to remember that you get the deduction for depreciation because it is anticipated that you will have additional expenses associated with renting the property.

If you are not financially prepared to be a landlord, you will be inconvenienced by having to come up with funds for the mortgage and repairs when it is least convenient for you. You will need to think of renting your home as being in business.