The decision to sell or rent out your home is a difficult one. On one side there is the potential to make a monthly income from renting, but on the other side, there is a lot of work that goes into managing a property. Selling a home can provide homeowners with cash now, whereas waiting for a few years and selling later could end up backfiring. Here are some important things to know about selling or renting a home.
Consider the following:
- Your current financial situation
- Local market conditions for selling a home and renting
- Future plans for home ownership
- Property management ability
- Future market conditions
If you are planning a permanent move, keeping a rental in a different area can be a little tricky. Some people find it is easier to hire a property management company to handle the rental of the home. If you do plan on returning to the home in the future, you must consider how the home will be treated by tenants. Even with a great contract, tenants still don’t provide the same type of upkeep and maintenance for the home the same way you do.
Costs of Renting a Home
One important thing to note when weighing the pros and cons of renting or selling a home is to determine the cash flow. Will the home be able to rent high enough to cover the payment and expenses? Some people like to keep the home as a rental property as it does aid in growing retirement.
Selling a home can place a tax burden on you if the home value is higher than $500,000, or if you are an investor and you haven’t been living in the home for the last two years. A rental home can be depreciated for taxes, which can help to reduce your tax burden yearly. Rental property owners can deduct several expenses from the home including:
- Repair costs
- Property taxes
- Community Association fees
Compare the current market value for the home and predictions for the future. Some people like to rent out the home for a few years as the property value could increase. However, if you are trying to upgrades to a bigger home, you may want to consider selling the home now to have more money to put into the new home.
Managing People and Property
A critical area of renting a property is being able to deal with people, and being able to manage the property. Will you be able to handle middle of the night phone calls when a water pipe bursts? How about dealing with a person who won’t pay rent? Renters are notorious for not caring for the property in the same way as the property owner, so scuffs on the walls, countertop stains or burns, and other wear and tear will happen.
Keyrenter Property Management in South Florida is here to help property owners with tenant management. If you do not have the ability to manage the property, let us help. We are able to handle all the issues from tenants who refuse to pay, to making sure the property isn’t vacant for a long duration.