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Take the Sale Profit or Become a Landlord
If
you don’t need the cash from the sale of your home, then renting
might be a great option for you. If, however, you do need to get a
quick return on your investment in order to buy another property
(i.e., if this is an investment property), then selling may be more
attractive. Either option can be a good choice, but you want to
carefully consider your options. To help you sort through the
confusion, here are some tips from Emil
Ratti.
Discussion on
Selling vs. Renting Your Rehabbed Property
There are a number of considerations to make when deciding between
selling and renting. If you need cash quickly, selling is usually
the better choice. This is because investors can typically get more
money by selling than they can by renting in the short term (after
rehabbing). On the other hand, if you want to hold on to your
property for a longer period of time for recurring revenue,
then you may want to keep it as a rental. Each option has its own
benefits. Read on to learn more about each.
The Benefits of
Selling
Selling your property immediately can be a very profitable
transaction. You can get a quick return on your investment and have
the money to use for another property. This is also much more
hands-off considering you avoid all the responsibilities of being a
landlord, which is many! If you sell the house, it is also gone! You
won’t be responsible for any maintenance or repairs as well.
The Benefits of
Renting
By renting your house you have the opportunity to make a lot of
money off of it. You also get to keep it for potentially a very long
time. Rents tend to rise, as do property values. You can always rent
out the property to someone else when you need money or if you want
to move away (not an option with selling).
You will also have
more control over who your tenants are and can require them to take
good care of your house. It's very important to properly vet
your tenants to
ensure this happens.
Lastly, there are
some good tax
benefits of
owning rental properties. You can take quite a few deductions for
work related to the property and you can also take advantage of
depreciation.
Things to
Consider as a Landlord
As a landlord, there are many things that you will be responsible
for. You have the responsibility to find a good tenant (i.e., credit
and background checks), make sure they have an appropriate lease in
place, and that they pay rent on time.
You will also need
to make repairs as needed (i.e., plumbing, electrical, water heater,
etc.), though it’s also possible to require
your tenants to
pay for the repairs. Additionally, you will need to hold on to some
funds in case major
repairs are
needed in order to ensure your tenant remains satisfied with their
rental. Lastly, you need to have key contractors on speed dial for
possible property fixes or even upgrades. Remember to vet their
qualifications and reviews!
It can be
worthwhile to have coverage
in a home owners warranty for
many repairs. This can help balance the costs of electrical,
plumbing, and HVAC repairs that will crop up over the course of
owning a property.
As you can see,
there are a multitude of considerations to weigh when deciding
whether or not to rent out your property. It's important for
homeowners to consider all the pros
and cons before
making this decision so that they make sure it is in their best
interest long-term. If you're uncertain about what option will work
best for you, carefully consider everything we've discussed in this
article.
If you need
assistance with residential real estate in New Jersey, trust real
estate agent Emil
Ratti with your business.
Article Submitted (2022) By:
Bret Engle |
DiyGuys.net
bret.engle@diyguys.net
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