Today, the same question keeps coming up with owners that are interested in selling their homes. If I can't sell it, should I rent it? Well, every situation is different.
There are so many factors an owner must take into consideration today,,, and some of these must be answered with the help of a REALTOR...
What is the reason you are selling?
Are you up to date on the mortgage payments?
Can you continue to comfortably make payments on the home? And for how long?
When did you purchase the home? Did you buy at the peak of the market in 2005?
What necessary items must be addressed to make the home market ready?
Are you in a position to realistically price the home to sell as soon as possible?
Are you willing to make your home the most competively priced home in your area in order to do this?
Some owners are reluctant or unable to do what is necessary to get their home in show condition and price it to quickly move off the market. Thus, the question comes up, should I rent the house out instead? Some feel that they want to wait for the market to "turn around", and for prices to head up again. As real estate is local in nature, none of us knows when that may be.
I own rental property of my own and I have since 1996. I enjoy working with many of my tenants, and frankly, over the years, I have had a few tenants that have been difficult. Owning rental property is not for everyone. And in my experience, I have never had a tenant return a rental house to me in better condition that I rented it to them in.
So, if you are thinking of renting out the home....
Are you willing to deal with tenants and toilets?
As I mentioned, do you understand that you may not get the property back in the same condition as when you rented it to the tenant? Are you prepared for that?
If the house sits vacant for a couple of months in between tenants, can you afford to make the mortgage payment, tax, insurance, homeowners fees and maintenance, repair costs and advertising expenses?
Are you in a financial position to make necessary repairs on the home, should the tenant call with maintenance issues?
Are you handy at all? Can you make any repairs on your own, to cut costs?
If the market should turn around, and the tenant is in place, sometimes a tenant occupied property is a bit tricker to sell than one without a tenant.
And one of the most important factors to consider is the tax implications. How might it affect you, changing the home from an owner occupied property to a rental? A homeowner that has lived in a property at least 2 of the 5 years prior to the sale of the property may be eligible for up to $500,000 of the gain if filing a joint tax return. $250,000 for an individual. Please check with an accountant or tax attorney on this.
So, homeowners, do your homework up front, so that you are sure to make the right choice for your individual situation.
So in your opinion, it is best to sell it, or best to rent it? What do you think?
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