As a full-service real estate company, we get homeowners from all walks of life in various stages of property ownership. However, no matter the property, every owner must ask themselves, "do I sell or do I rent my place out?" It's not an easy question to answer but we think with a little help, we can walk you through some of the variables you'll have to consider before you make the jump either way.
Will the Property Cash Flow?
The first question you have to ask yourself is whether or not your property will cash flow. This is the most straight forward answer you will get because the numbers will not lie. Will your property produce a profit after all expenses (mortgage, taxes, insurance, utilities, management, vacancy, repairs, HOAs, etc.)
Most people are not free and clear from their mortgage when they rent their property, but if the return is high enough, then it might be worth it. Not only will you get a profit but the tenant will essentially be paying your mortgage.
Will you get a return on your investment now?
Talk to a real estate professional to get the sale comparisons to your property. See what type of return you can get on your investment if you were to place it on the market today. If it's not what you hoped, it might be worth it to hold on to until the market comes around to your favor.
What is the market prediction for the next few years?
Some markets are on a steady climb right now, so if the future looks bright, then you might want to rent the property now and sell down the road to maximize the return on your investment. Questions to ask are: What might the market look like in three, five and ten years from now? Is the neighborhood improving? How does my house rank in the surrounding areas? Will demand only increase with time? All important considerations when making an educated projection.
Ready to move but not move on?
Sometimes things just happen. You might have recently purchased a house but need to take a job in a different city, or it is a family home you aren't ready to sell. It might be advantageous to hold on to your property if it cash flows correctly.
Deciding if you should sell or rent your house is a difficult decision to make but can ultimately set up or hurt future income earnings. Owning or selling properties comes with a variety of taxes from capital gains to property taxes. The trick is not to answer these questions alone. Every owner’s financial situation is unique. Talk to a property manager, real estate agent and CPA to make sure you are professionally informed before you decide.