headaches that come with that responsibility. Property management is a dynamic, hands-on job, meaning you do not simply rent out your home and wait for the income and tax benefits to roll in. There will be both regular maintenance needs (e.g., landscaping, general repair) and emergency maintenance (e.g., the hot water heater that bursts at 3 am while you are out of town.) Bad tenants are a serious concern for owners renting houses. They can cause damage to property. They might be late on rent payments or not pay rent at all. Renters have no long-term investment in the home, and because of that there is the risk that some renters will not treat your house like a home. This can cause additional expenses for repairs, perhaps involve legal fees for eviction proceedings, and may eliminate the benefits of renting out your property. Background checks and requiring references on potential tenants are advised. Vetting potential tenants is one of the additional responsibilities a landlord takes on. If you are expecting to sell within a few months to a year or two, another con to be wary of is that having tenants in the home can make the home more difficult to sell. For example, say you have let your tenant know that you are planning to sell, and that they must relocate within two months’ time. If they do not have other options, they may drag their feet and make it as difficult as possible for you to prepare the home to sell. Whereas, if your home were empty, you could easily clean up and get the property ready for the potential buyers, without having to work around your tenant’s schedule. Converting residential to rental property may involve capital gains tax. If you lived in the house for at least two years, then rented it out for under three years, you might be able to use a provision that allows you to exclude up to $500,000 of gains tax-free. If you plan to sell a home you’ve converted to rental property, you should consult an accountant or tax expert and a
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