Should I Rent or Sell My Property?

Should I Rent or Sell My Property?

This is a common question owners have when they plan to move out of their houses. Only you can answer this question, and it depends on multiple factors:

1. Do you need the money from a sale? If you’re planning to purchase another home and need cash from the equity you have in your current home, you may need to sell or refinance. If you refinance and pull money out, your payment will most likely increase as well.
2. Are you prepared financially to support this house when it’s vacant or needs improvements along with where you’re living? Ideally, tenants will be paying you rent, so you’ll be receiving income as well, but unfortunately, this isn’t always the case. You may have tenants who have circumstances changed and who cannot afford to pay the rent and stay until you evict them. If this happens, you’ll still need to pay bills for the property, repairs, and eviction costs while not receiving any rental income. Depending on your area, evictions may only take weeks, but sometimes they can take months.
   Tenants are responsible for damage, but owners are still accountable for everyday wear, tear, and everything in the property will break and need repairs and eventually need to be replaced. Do you have $5000-$10,000 in cash to replace the carpet or paint? If you plan to do these things yourself or use a discount handyperson, then usually you pay in time since it can take a long with a smaller crew, and while the job may not cost as much as hiring a company, it may be vacant longer which means you’ve lost rental income.
3. Is your property a good rental? What properties owners choose to buy and live in as their homes don’t always make the best rental properties. You may have a lot of upgrades that tenants like and will make it easier to rent but cut into your profit since fixing or replacing high-end appliances that you enjoyed when you were living there wasn’t something you counted on doing when you’re no longer using them.
4. How is the sales market right now? Now may not be a great time to sell, and you may not even be able to if you bought and have a mortgage higher than what the current market says the property is worth. You have more options if the sales market is strong and it’s a good time.
5. How is the rental market? The rental and sales markets are separate and can be both good and bad, and while they influence each other, they are not dependent on each other. What can your property realistically rent for right now? The rental market changes all the time, and what it will rent for now might be different from what it was a year ago and will most likely be different next year. Markets overtime go up, but month-to-month and year-to-year, they can go down, so you cannot count on rents increasing steadily year after year.
6. Will you manage it yourself or hire a professional property manager? Assuming you’re moving close by, do you have the time, knowledge, and experience to manage the home yourself? Are you familiar with fair housing laws and local rental ordinances? Do you have trusted and reliable vendors who will respond promptly when needed? Are you available 24/7 if your tenant has an emergency and calls you on nights, weekends, or holidays? If not, you may want to hire someone and factor that expense into your budget.
7. What other options do you have for investing? Maybe you’re a whiz at investing in the stock market or want to start your own business, and you may have other options for investing your money that are more appealing than real estate.

Owning rental homes can be a great way to generate wealth long-term, but there is risk and no guarantees. Every person’s situation and risk tolerance are different, so you must determine what’s best for you when deciding whether or not to keep your property as a rental or sell. Call us if you have questions about selling or renting your property.

We are the one you want if you are looking for a Spring Property Management Company! RentLife® Property Management CRMC® is the best choice for property management in Cypress, TX. We also offer rentals and property management in Humble, Katy, Richmond, Spring, The Woodlands, Tomball, Conroe, Houston, Magnolia, and other surrounding areas. Contact us today at www.rentlifepm.com or Call 832-562-3600.