Becoming an Accidental Landlord: 10 Reasons Why You Should Keep Your House for Passive Income
Downsizing? Upsizing? Relocating? Regardless of where you’re going or why, moving is always a hassle. It’s exhausting, emotional, and tedious, and can also be quite costly. The focus is often on the stress of the process and all of the work ahead of you, but it’s what you’re leaving behind that you should be homing in on.
Before you hammer in that “For Sale” sign, you might want to explore what could become your most valuable asset: becoming an accidental landlord. Some people shudder when they hear the word “landlord” and equate it to unwanted and unnecessary headaches, but we’re here to shed light on the other side of property investing, where the grass really is greener.
10 Reasons Why You Should Keep Your House for Passive Income
Generate Income While You Sleep💰
We’ll start with the obvious: the money. The sweetest dreams happen when you can count dollars instead of sheep while you’re drifting off to sleep. Not only will your tenants’ rent cover your mortgage, but it can also generate positive cashflow—the money that’s left over after you’ve paid all your monthly expenses, including the mortgage, property taxes, insurance, maintenance, and management fees.
For example, if your rental brings in $2,500 per month and your total monthly costs come to $2,000, that’s $500 in net cash flow in your pocket every single month. Over the course of a year, that’s $6,000 in profit—without even touching the property’s appreciation, debt pay down, or tax benefits. This surplus can be used to pay down debt faster, reinvest in another property, or simply boost your lifestyle—all while your asset continues to grow in value.
2. Preserve Your Low Mortgage Rate 🔒
The average interest rate in Central Connecticut over a 50 year span is X%. If your rate is X% or lower, you’d be doing yourself a disservice by letting that asset go. Don’t surrender that historically low mortgage rate you snagged. Keep chipping away at the principle while your property appreciates.
3. Access Equity Without Selling 🍰
People often resort to selling their homes to secure access to liquid cash, but it’s possible to have your cake and eat it, too. As you’ve built up equity in your property, you’ve earned the right to a HELOC (home equity line of credit) that will allow you to keep your home and have quick access to your money, while also collecting rent at the same time.
4. Create a Retirement Income Stream 🌟
When you think about your retirement, what does it look like? Are you traveling the globe? Do you finally have that house on the lake with the wrap-around porch? Have you perfected your golf swing? Regardless of how you envision your golden years, we’d bet it doesn’t involve working 40 hours a week.
Not only can rental properties provide a steady stream of passive income to cover your lifestyle expenses, but they also grow more valuable over time. Just in the last 5 years, single-family homes in Central Connecticut have appreciated by an average of 3%. Although that is an extraordinary return, even if the property appreciated closer to an average rate of 3%, then your property you had purchased at $500,00 would appreciate to ...(Please run the math). That appreciation, paired with the equity you've built through mortgage paydown and increasing rental income annually, positions your investment as a powerful wealth-building asset.
5. Plan for the Future 🏡
If you’ve had so much as a passing thought that you may want to return to your house in the future, don’t burden yourself with the significant time and money that coincides with selling a property. Rent your asset and avoid the agent fees, conveyance tax, closing fees, market preparation, and other costs associated with selling and purchasing a home. Plus, if you don’t sell it, you can guarantee it’ll be available when you’re ready to return.
6. Rent While You’re Away 🧳
Professors, traveling nurses, performers, and other short term travelers shouldn’t have to sacrifice their house for their work. If you’re leaving temporarily, rent your property while you’re gone so you can relax knowing you have the comfort of your home waiting for you when you get back. Be sure to disclose the length of the lease to your tenants, upfront, so they’re informed of the terms.
7. Store Your Belongings 🛋️
Too much stuff? Join the club. If you’re downsizing or welcoming a newfound minimalist lifestyle, offering a fully furnished property is always an option. TV’s can remain on the wall and oftentimes, you can even use your shed to store many of your belongings.
8. Let Tenants Handle Utilities and Upkeep 💡
A bill in the mail that isn’t addressed to you? It almost sounds too good to be true. For single family property owners, tenants can be responsible for maintenance, including lawn mowing and snow removal. Plus, all utilities will be placed in their name: electric, oil, gas and internet, so you can relinquish the less enjoyable parts of home ownership.
9. Market Your Property the Right Way 📸
Don’t let the fear of vacancy keep you from launching your greatest passive income stream. In Connecticut, the average vacancy rate is 32%. While that number sounds intimidating, working with a property management company is the the most effective way to keep that number at a minimum. Their skilled team will procure professional photos of your property before you start packing and moving furniture. This allows potential tenants to envision themselves in the home, and best positions you to secure a renter as quickly as possible.
10. Let a Property Manager Handle the Hassle 🧘♂️
We get it – you don’t want your phone ringing in the middle of the night to hear about a clogged toilet. Enlist the help of a trusted property management company, like Unbundled, and we’ll take the lead on day-to-day maintenance, allowing you to sidestep headaches while upholding superior property care and tenant satisfaction.
Sure, money doesn’t grow on trees, but property investing is definitely the next best thing. With a reliable and dependable property management company leading the charge, you’ll be turning doors into dollars and keys into cash, without having to lift a finger. Now that’s something to write home about!
