Rent Or Sell?
Should I Rent Or Sell My Home?
And How Do You Decide?
The season for selling and buying homes is upon us, which may leave you with a decision you’ve been weighing. Is it time to sell your home, or should you turn it into an investment property and rent it out?
We get calls everyday with this very question and the honest truth is, the answer is different for everyone. There’s a variety of factors that can determine whether or not this is the best decision for you and your family. Did you inherit a property? Has your family outgrown your current home? Are you being transferred? Have you always wanted an investment property and are wondering if now is the time?
We Can Help You
If you’re asking us for our honest opinion, honesty is what you’ll get. We’re not interested in merely gaining clients for the sake of gaining numbers. We’re interested in YOU and getting YOU the BEST investment for your home. And, (you may not hear a lot of property management companies say this) sometimes that means NOT renting your home. We’ll always treat you with the respect and integrity that you deserve, because YOU are our top priority.
But first, before you make your decision, you may want to ask yourself some of these questions:
Will My Investment Property Be Profitable?
Determining the amount of profit you will make depends on a few things: the current market the house is in, the rental rate, the existing expenses and the expenses that could accrue when you purchase an additional home you’ll actually be living in.
Looking at rental sites to get an idea of what your rent would actually be is a good idea, and consulting a local real estate agent just might be even better. If you don’t yet have an agent, consider us! Not only do we work in Property Management, but we are a licensed Real Estate Agent as well. We’ve been in the business for over 30 years!
You should also consider long term rent prices and whether they will go up or down. This is something we can help you with as well, as we stay up to date on the current trends.
How Do I Feel About Being A Landlord?
The idea of renting out to tenants can be stressful, as you don’t know the people who are going to be living in your home. How do you know they’ll be trustworthy? Will they pay on time? Will they respect my home? Do I have time to answer all their calls and keep up with the maintenance? Can I legally evict someone who fails to pay?
If the idea of wear and tear on your home sends you into a panic attack, maybe renting your home isn’t the best option.
OR … maybe it’s time to take a look at a Property Management Company who can help keep these fears under control and manage the potential headache that being a landlord can be. Any Property Management Company worth its salt should carefully screen each applicant including: credit check, employment verification, criminal check and previous eviction check. If the Property Management Company doesn’t show careful concern over WHO will be occupying your home and making sure that they’re taking measures to protect your investment, you should move on.
Are You Moving Temporarily?
Your current job may have you on a temporary relocation, or it could be permanent. In either case, you may not quite be sure where the road is headed, but it would definitely be cheaper in almost all cases to rent out your house and move back in when or if you return.
If you decide you will not be returning, the option to sell the property never has to be taken off the table. If you decide to sell in the future, you can rent your home for up to three years without losing the chance to sell it and avoid capital gains tax. As long as you have owned and lived in the property for two of the five years prior to selling it, any capital gain tax can be excluded for the most part.
What Will The Market Look Like In The Future?
Even if your house isn’t necessarily in a rental market that’s going to cover all your expenses now, you might make up for the loss if the homes value is supposed to increase before you sell it. Also, those annual losses might be tax deductible which would save you money on your tax bill.
If your housing market IS expected to increase in value significantly, renting it out will allow you to keep it while paying the mortgage down, therefore earning a larger pay day down the line. If you’re also someone who needs to make home improvements but don’t have the money for that right now, renting could also be a good option.
All that to say, we know it’s a big decision. And, we’re here to help! Like we said, if we don’t believe that renting is the best choice for you, we’re going to be honest with you.