Premier Properties OC
Rent or Sell?
THINGS TO CONSIDER
Should You Sell Your House or Keep it as a Rental?
Sometimes, the decision to sell or rent isn’t as easy as it seems. The option to keep your home as a rental property can be enticing. But, there are some key things to consider before you make a final decision to sell or rent your house.
The main one is to calculate if which will be more profitable for you. Taking a look at the rental market in your area and figure out if your home will pay out in your favor. In some cases, it might be best to sell and get rid of a headache you’re not ready to take on yet.
When determining if renting is a valuable direction to take, here are some benefits you can take advantage of once you have a tenant in your house.
Choosing to keep your house as an investment doesn’t have to cost you much. In fact, it can pay for itself and possibly more. Depending on how you set up your rental, the income can be completely residual.
Depending on your mortgage payment and the rental values in the area, you could possibly set rent at a price point to potentially cover your mortgage, hiring a property management company, and having some savings in case a repair on the home is needed in the future. At the very least, your tenants rent each month should cover the principal of your monthly mortgage payment.
Appreciation in Value
If you’re in an area where property values are continuing to go up, that’s a huge positive for you if you decide to rent out your house. The equity in the home will continue to increase, but your mortgage payment will remain the same. As tenants turnover, you can adjust the rental rate to meet the new value of the home and rental demands in the area.
In the end, if a rental property doesn’t have the outcome you desire, you can turn around and sell the house in hopes of making some money from any equity that has built up while you’ve owned it.
Risks of renting it out
There is some risk in every big decision and choosing to rent instead of selling has a few to be aware of. Once you know what they are, you’ll better be able to determine if they are risks you’re willing to take.
Just like hiring someone to work for you, you’ll want to interview tenants before having them sign a lease agreement which will take some of your valuable time. Rental applications typically ask for rental history so that you can assess the applicant’s track record or if you’ll end up evicting them before the lease is up. Do some research on red flags to look for when interviewing and conducting background checks on tenants to make sure you’re not fooled. In the end, finding a great tenant is well worth the time.
In the beginning, it might cost more to get your home rental ready. It’s not something ever future landlord can afford.
Just like selling a house, certain repairs and fixes should be taken care of before tenants even start looking to rent your house.
Having these repairs completed before showing your rental will increase your chances to get the most for your rental. It will also get renters in the home sooner rather than later.
It all comes down to Risk vs Reward
In the end, the final decision is going to come down to risk vs. reward. The reward of having great tenants who give you a steady income and treat your home well is incredible. But, it doesn’t entirely eliminate the risk of having to evict a tenant or make a significant home repair after they move out.
Heather & Josh Huntington