Hard-to-sell homes: 4 things you must do before renting
By Nancy Nall Derringer

• Be flexible. If you need to rent your house, chances are others do, too. Your house may go unrented for a few weeks or even a few months. If you rent your house to a company, particularly for use by an overseas employee, it may require a "diplomatic clause" that allows it to break the lease with 60 days' notice. "Prepare for some down time," advises Hans Stahl. "A two-year lease doesn't necessarily mean two years."

• Talk to your accountant or tax advisor. Renting has tax implications for landlords. Rental income is taxable. Some states revoke the homestead exemption on your property taxes if a house is no longer owner-occupied. You can depreciate a rental property, which can offset your property-tax gain, but also be aware of depreciation recapture, in which depreciation allowances are taxed, upon sale, as capital gains. "That's one thing I wished I'd known about going in," said Robert Haskins, who rented his house in Maine for four years.

• Call your insurance agent. Your owner-occupied homeowners' policy likely won't cover your house as a rental. The agent will also advises setting up a limited-liability corporation, or LLC, and signing a quit-claim deed to turn your house over to the LLC. This will protect your personal assets, should you be sued by a tenant or guest. An attorney can set this up.

• Know your local occupancy rate and set your rents accordingly. This is a good place for a reality check, too; if your mortgage payment is already above what you could charge for rent, you're going into it backwards. It's probably time to lower your selling price and get out from under it.

Florida Rent Locators
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