Should I Sell My Home Or Rent It Out?
If you’re not using a property that you own, you might see the advantages of making a profit or recouping mortgage payments by renting it out. There are between 10-11 million individual investors and landlords in the United States according to the Department of Housing and Urban Development, each of whom owns two units each on average.
Of course, while renting might seem like a popular option, it certainly isn’t for everyone.
Property management is very time-consuming and a major commitment. Prior to putting your property on the market, you will need to make any necessary repairs. If you sell your home, later on, you will face higher taxes and insurance costs.
Plus, there is always the 50/50 chance that you could end up with horrible tenants who fail to pay rent on time or damage your property.
You must first consider the amount of time it will take to make your house rentable, put it on the market, keep it maintained, and steer clear of any potential problems during the rental period.
Getting your house to a rentable state requires cleaning, decluttering, and potential repairs. You may need to put in new flooring or give it a fresh coat of paint.
In the chance that you get stuck with a not-so-great tenant, you might have to go through the eviction process, which can be incredibly time-consuming.
Of course, there is always the possibility of hiring a reputable management company when it comes to marketing, repairs, and tenant service. However, these services can cost quite a bit. If your rental income doesn’t exceed the costs of the management service, then there is truly no point.
People often rent because it is a lucrative business. On average, an Airbnb host can earn up to $924 per month. If it won’t produce a profit, however, then there is no point in renting out your home. Before deciding to rent, you need to figure out whether or not your rental income will outweigh your costs for operation.
To get an idea of what you can charge, you must research other rental properties in your area. Next, you must add your property taxes, mortgage payment, HOA fees, management fees, insurance, utilities, and other costs to create your figure.
Make sure to account for costs connected with maintenance and repairs as well. Experts recommend storing away at least 1% of the home’s value each year.
A home worth $300,000 should have a maintenance budget of $3,000.
Selling Vs. Renting
As you can see, there are plenty of considerations to make when deciding whether to sell or rent your property. Here are a few reasons you might choose to sell instead of rent:
- You are in need of money right now
- Your home is in distress and you do not have the available funds to make the necessary repairs for rentability
- You cannot commit to the time it takes to deal with the needs of tenants.
If you’re interested in selling your home quickly for a fair market price, make sure to get in touch with us here at National Cash Offer.