We receive a lot of calls from people when they obtain a property – often by inheriting it – and they aren’t sure if they should sell the house or rent it out. It’s an interesting question, and today we will share a synopsis of what each option entails. Hopefully, you’ll get some ideas about what to do if you find yourself in a similar circumstance.
First, you need to determine what the cash flow would be if you decide to rent it out. A good property manager will know what kind of rent the property will get. Compare the house to others on the market and determine how much you will earn on a monthly basis. You’ll have to factor in the vacancy rates in the neighborhood where the property is located, and what kinds of costs would be associated with keeping the property. When you do the math, you’ll know soon know what kind of cash flow to anticipate by renting out the home.
When you consider selling, you’ll have to take a look at the property’s value. There are a number of tax implications when it comes to the mortgage and the sale of a property. You’ll have to examine the sales market as well. You’ll want to know what to expect based on whether the housing market is going up, down or remaining stable.
These are the factors to consider when deciding whether to rent or sell. Recently, we worked with three sisters who got a property when their mother went into a senior living situation. This included an emotional factor in their decision-making. They had all lived in the house, so naturally they had an attachment to the property. We looked at the market and decided that renting it out would be the best course of action for them. Over the last couple of years, the sisters have seen the property value increase, which we expected. So, they have gained equity in the property as well as receiving a monthly income.
There are lots of factors to consider when you face the question of whether to sell your home or rent it out. We would be happy to provide a consultation, so if you have any questions or need further information, please contact us at Astound Property Management.