I just got through this exact situation. I hated being a landlord... with the rent, we were about break-even during that time, however, when you start to add in the hassle factor and the wear and tear that I had to fix at the end, it wasn't worth it.
If you decide to rent:
1) list through a realtor. Yes, you'll pay a commission, but they also should do the credit check, reference check, etc. It is also an advantage to use their lease, which probably has been legally vetted and is more air tight.
2) document document document. take photos of the house before they move it.
3) figure out your true carrying cost. It isn't just the mortgage.
also include:
- property tax
- insurance
- any maintenance items that you must cover (for example, I was responsible for:
=> pest control
=> septic pumping
=> sprinkler turn-on/blowing out (I also paid part of the water bill. They didn't want to run the sprinkler to water the lawn. I didn't want my lawn to die, so in summer months, we agreed that I would pay the water bill above a certain amount.)
=> fertilizing the lawn
=> heating/air conditioning service contract which covered filter changing, etc.
4) expect to pay some money at the end to fix things... that may not be covered under the security deposit... small nicks, etc. in the paint, floors, etc.
I had damage that I never expected:
- dented the stainless steel built-in fridge. I got a new 'skin' for the front of it, but it was *expensive*. I took this out of their security deposit, since I was lucky and had good pictures before and after that clearly showed the damage. I also had an email from the tenant saying they were playing ball in the kitchen and broke one of the pendant lights, so I could document that they were doing something that could damage it.
- re-painted the basement. They did things down there above and beyond normal wear and tear that I could document. (ie. green pool chalk all over the walls near the pool table + divots/dents in wall).
- an oven rack missing. I know, huh? I found out later they had thrown it away. I ordered a new one and charged them.
- broken pendant lights in the kitchen. I was lucky that they still sell them and I could get replacements.
- broken screen door. Not repairable, so I just took it off and repainted the trim and pretended it wasn't there. was able to charge them.
- missing window grilles. all I could figure is that they were cleaning and broke them. I replaced them and charged them.
there were other little things that I couldn't charge for:
- something hot on formica countertop in basement - melted the top.
- stained carpet that couldn't get clean.
- holes in linoleum in laundry room.
- carpet.
they were 'perfect' tenants according to their history and references. I was lucky that I could document everything and they called about 2 weeks after I returned the (small) remainder of their security deposit back. They threatened to take me to small claims court, but after we talked, they backed off. They cashed the check 2 months later and I haven't heard a thing.
so.... that's my story. I'm sticking with it. Just go in with your eyes very very very wide open.
(btw, I hated worrying about that middle of the night phone call: "our heat is out, our water doesn't work, etc etc")
