You've been offered a job transfer, and it's simply too tempting to resist. But there's a catch: It's a temporary assignment, and depending upon your performance and the various other conditions within the company, there's a remote possibility it could turn into something permanent. You have no guarantees, however. And you love your current home. Should you rent it out, based on the assumption that you'll be returning in the future? Or would it be more advantageous financially to sell your home, instead? Assuming you decided to rent out your home, how would you do it?

The first step is to determine the market value of your home, and the most accurate assessment you'll receive will come from a certified home appraiser. A Realtor could "ballpark" your home's value, but even if his or her estimate is based on years of seasoned experience, it's not likely to be as accurate as that of an objective home appraiser. It's particularly critical that you obtain an accurate appraisal because you might discover that your home is worth far more than you anticipated - in which case selling may suddenly appear to be a much wiser option, even if you do love your home.

How do you determine a reasonable monthly rent for your home? The easiest way to figure out a monthly rent is to scan the classifieds in your local newspaper, or research local rental rates online at community Web sites. You might also consider contacting a rental agency for guidance.

If you're considering renting your home out to another occupant, and being a landlord is a role you've never assumed before, remember that you'll still have to cover the costs of owning your home. Those expenses - including mortgage, taxes and insurance, as well as maintenance and associated fees and possibly utilities -- won't go away, and they'll have to be deducted from the monthly rent you're charging in order to determine your income from the property. Subtract those monthly costs of ownership from the monthly rental rate you've determined. If the costs of ownership exceed the monthly rate, obviously, renting isn't the best choice for you. But if the answer is positive, you'll need to weigh your resulting monthly income next to your financial compensation from selling your home.

What if the tenant who moves into your home upon your departure terminates his or her lease before you arrive home, and you don't find another replacement tenant immediately? You must consider this scenario because it's a very likely one, particularly in our here-today, gone-tomorrow society, in which sudden job transfers (like your own) are very common. In this case, you'll be responsible for the costs of ownership and won't have a rent check to help offset those expenses.

Another factor to consider before renting out your home to a tenant: Are you willing to assume the responsibilities of being a landlord? What if your tenant encounters maintenance problems with your home? Are you prepared for the possibility that you'll be called to resolve a leaky roof or other problem at precisely the time when you're trying to acclimate to a new set of job responsibilities and a new environment? A landlord's job can be a headache, and the stress is only magnified when you're trying to be a long-distance landlord. You'll need to comply with your state's regulations for landlords, all of which you'll have to become familiar with before assuming this new role.

Do you understand the terms of a lease? Are you prepared to deal with a problem tenant, should the occasion arise? What if the tenant fails to pay rent? Do you know under which terms you may evict? And are you willing to rent out your home to a relative stranger? If you can find someone you know - even if he or she is merely an acquaintance - you'll at least have some degree of familiarity with the tenant's habits and lifestyle.

Renting to a stranger is risky. It's quite possible that you could return to a home that's in much different condition than the way you left it. And if that's the case, you're going to have to spend money on repairs and expensive maintenance.

We haven't yet weighed some other factors, and they're critical ones that you'll need to consider before making your final decision. What about the tax benefits you enjoy as a homeowner? Are property values steadily rising in your market, or are they stagnating or even dropping? What's the renter's market like in your hometown? Are other properties on your block for rent, or is your neighborhood one that doesn't see many properties for rent because it's older and very established? Because attempting to determine whether renting or selling your home is the wiser decision carries with it a lot of consequence, it's in your best interests to obtain the services of a financial counselor, upon whose advice you can trust.

Published: November 1, 2000

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