Watch out, investor! Life is going to throw some serious dilemmas at you! One important choice that real estate investors and property owners have to face sooner or later is, “should I sell or rent my house?” It’s a question that many real estate investors will have to go through sooner or later in their careers. Weighing the options of whether to go for a rental property or cash out can be a lot like Sophie’s choice for the real estate investor.
If you’re wondering should I sell or rent my house, and you’re not sure which one offers you more financial returns, let’s cut to the chase and find what each real estate investment strategy can offer you and why should go for it.
Why should I sell my house?
Here are a few reasons why you should sell your investment property:
Being a landlord is not for everyone
Debating whether to become a landlord or not is a tough decision to make. Many give you the fast answer of yes without knowing what being a landlord entails. If you ask a landlord, he/she will tell you that it isn’t an easy job. Getting those late-night calls about maintenance related issues or late rent checks is not the best of things to deal with. So, if you think that you don’t have the public relations and management skills to pull it off, you should opt for selling your property or delegate management duties to a property management company.
It’s a good time to sell a property
Finding the right conditions that make up a seller’s market is not easy in today’s real estate market. However, for those real estate investors who find themselves in a hot seller’s market, by all means, go for it. To be exact, a big indication of a seller’s market can be as subtle as having many properties sold in the area and properties selling faster than 30 days on the market. To get to know more details about the difference between a seller’s market and a buyer’s market, read this blog post: Is the 2018 US Housing Market a Seller’s Market or a Buyer’s Market?
Releasing equity from an investment property
If you’re a homeowner or a real estate investor, then you have to know about equity. Equity, in short, is the difference between the market value of your investment property and the mortgage. Selling an investment property is among the easiest methods of releasing your equity out of a property. However, many real estate investors go for a HELOC, Home Equity Line of Credit. A HELOC can be a good alternative if you’re not interested in selling. Keep in mind that it’s a form of a loan and more interest rates will apply to you. To get to know more information about real estate equity, read this blog post: Release Equity to Buy Another House – Basic Guide.
Cutting roots in a certain location
For someone who’s relocating to a different city or state, it’s not uncommon to find yourself debating, “should I sell or rent my house?” It makes perfect sense if you’re leaving your home city to start a new life in another. Additionally, it’s not an easy task to maintain a rental property from afar.
Why should I rent my house?
Here are a few of the most common reasons for owning a rental property:
You can hire professional property management
Today, it’s not uncommon to hire a professional to take care of the muddy work that comes with being a landlord. Keep in mind that we’re not advocating hiring professional property management, but in many cases of real estate investing, it is a must! Real estate investors with real estate investment portfolios of all shapes and sizes go for professional property management. Most importantly, you won’t have to do much, other than the monthly rent check cashing!
Rental properties are a great future investment
For those who are skeptical and still debating “should I sell or rent my house?”, it doesn’t take much thinking to come to the realization of what a good and safe investment a rental property really is. Additionally, rental properties provide the magical dust of cash flow, not an easily attainable thing for the average Joe. Of course, if you still have a mortgage on the property, check if the rental income generated by the rental property is more than the monthly mortgage payments. If yes, you are probably better off keeping that property as a rental and enjoying the extra monthly income. To better understand the viability of rental properties as an investment, read this blog post: How to Make Money in Real Estate: Buy a Rental Property.
You will miss out on real estate appreciation
While real estate appreciation may not be the first thing that property sellers think of when deciding to sell their properties, it should be the main determinant in answering the question of should I sell or rent my house? Property prices will rise whether you keep the rental property or sell it. And that’s a fact!
If you’re not going away for good
If you know you’ll be back in that neighborhood or area, you’re probably better off keeping that investment property for a while. It’s always a better idea to keep the investment property until you know what you want to do next. After all, you get more value by keeping your property than selling it and buying a new one when you return to the area.
Should I sell or rent my house?
It’s not an easy decision to make without the analytical resources that professional real estate investors use. Keep in mind that much of that technology is available to property buyers and sellers whether they are real estate investors or not. We’re referring to the use of an investment property calculator. This can do wonders in helping you make that decision. An investment property calculator will tell you through measurable facts whether you should buy or sell your investment property. In other words, it can help you weigh your options when comparing rental income, expenses, taxes, mortgage payments, and even real estate appreciation.
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The world of real estate is everchanging. One day you’ll own a property, the next you’re selling it. It’s quite remarkable how one property can generate wealth for real estate investors. Should I sell or rent my house? It’s really up to you. Just make sure to do your due diligence and act intelligently in order to make money in real estate.
If you have any more insights on the answer to “should I sell or rent my house?” feel free to share them with us in the comments section below.