Homesteading is all about taking independence, it’s about taking back control. It means taking control of your health by growing and harvesting the food you eat. This way you can get to eat organic vegetables every day that are loaded with nutrients that the genetically modified crops lining supermarket shelves can’t hope to compete with. It means eating eggs and dairy products from animals that are treated with care, love, and respect rather than having to endure the suffering that takes place on many intensive farms across the globe. It means making your own cosmetics and cleaning products using natural ingredients that aren’t loaded with harsh chemicals that are damaging to the environment. And it means using your food waste to facilitate the growth of what you will eat when the next harvest comes around. In a world driven crazy by an obsession with profit margins and a flagrant disregard for the impact our disposable society has on our environment, it’s the only sane way to live.
It’s also, however, a full-time job and a major investment. Running a homestead requires a lot of hard work, time and effort. Especially to maintain and a healthy dose of ready capital to invest. Though it’s possible to start homesteading even with no money behind you, Thus, if you’re able to do so while renting out your old home, it can provide you with a steady stream of passive income to help ensure that you have the financial stability from which to build your homestead and help it to flourish. But renting out your home isn’t quite as simple as many people realize. There are many pitfalls that can eat into the profit margin on your rental income. Some can even end up costing you more money. Here are some ways in which you can ensure that you get it right and make it work for you…
Renting Out Your Old Home While Homesteading
Invest in the renovations your old home needs
If you have a homesteading project on the horizon, it’s understandable that you might be reluctant to invest capital in your old home. You want to sink every available dollar you have into your homestead. This is commendable but your old home will be a source of income. That makes what you’re doing a business. And like any other business, you have to walk the line between managing the overhead costs that can compromise your monthly income while investing prudently in the capital investments that will help to grow your returns.
Thus, taking the time to invest in a new kitchen or bathroom suite, and exterior renovations will ensure that you will make more money when renting out your old home. If you use the same company for these, you’ll even save money too, learn more now about how you can do this. Investing in these areas can increase your chances of finding a tenant more quickly. This ensures your home doesn’t spend months on the market unoccupied and costing you money. It also means that you’ll be able to command a greater rental sum per calendar month. This will help to protect your profit margins.
Do what you can, where you can
Homesteaders tend to be resourceful people with a good working knowledge of everything from carpentry to electrical to plumbing. These are skills that make not just great homesteaders but great landlords, too. If something goes wrong in your rental property, you’ll be ideally placed to get on site quickly. Then you can deal with the problem effectively and decisively. This is yet another advantage to renting out your old home.
This is useful as not only will you save money on an external contractor (unless the problem is beyond your capability to repair), but it will deepen your tenants trust in you as a landlord. They will feel that they can approach you and place their trust in you. This means that they will likely want to stay in the home longer. This means that you’ll be saved a fortune in advertising costs to try and find a new tenant. And while also ensuring that your old home won’t lose money sitting for weeks or even months without an occupant.
Rent: Finding that golden number
If you’ve lived in a rental property for years, it can be difficult to know what to charge for rent. Aim too low and you could be missing out on passive revenue. Aim too much and you could take a long time to fill the property. Take a look at real estate websites to get a rough idea of what landlords are charging for similar properties in your area. It helps to work out how much money you need the property to make in order to pay for your homestead costs. If in doubt, consult a realtor to get a free valuation of the property. This is an important step when renting our your old home.
Property Management Companies: Yay or nay?
In the dual roles of landlord and homesteader, you’ll have a lot of responsibilities that could see you working long hours and coping with a lot of commitments. Enlisting the aid of a leasing agent or property management company can help to alleviate some of this burden. Although they do come at a price.
It’s up to you to weigh up the pros and cons of using a property management company and balance the time and effort they could save you against the extent to which they can impinge upon your profits. Most leasing agents will charge a fee of around 5-10% of your rental income. If your rental income exceeds your mortgage by a healthy amount they may well be worth the expenditure. Time and effort can be saved in;
- Dealing with tenants’ queries
- Work with you to determine a rental figure that meets your expectations and is appropriate for the property
- Helping to market the property when unoccupied
- Showing prospective tenants around the property
- Carrying out repairs and maintenance
- Collecting rent
- Dealing with late rent payments
If you want to commit yourself entirely to your homestead and aren’t too concerned with the personal touch as a landlord, a good property management company can make handling your dual role virtually effortless. If you intend to rent out multiple properties or if your homestead is a significant distance from your rental property this is even more advantageous.
Renting out your old home can bring in a steady income to your current homestead. That doesn’t mean it will be easy and there may be some work to do. But in the long run, renting out your old home could be the financial answer you’ve been looking for.
Do you rent out your old home while homesteading? Do you have any advice for our readers? Please add them in the comment box below.