Thinking about selling your home? You may want to consider holding on to it, if you can afford to do so. Here's why. In this market, rental properties are scarce and rental rates are at a premium. Due to our uncertain economy, there are still many that prefer to rent or may have no other option due to their financial situation. And where do most people want to rent? In single family homes. So if you have enough reserves, usually 6 months, to cover your mortgage in case you have no renters, you could buy a new home while keeping your current home as an investment property.
Things to consider:
- Check with a lender to see if you qualify for this option.
- Find out what the rental rates are in your neighborhood for similar properties. If it is more than your current mortgage payment you could stand to make money each month as well enjoy tax benefits.
- Consider whether you will manage the property or if you will hire a property management company to do it for you. They typically charge 10% of your rental rate. If it is only one property, you can likely manage it yourself.
- Research how you will find renters. Zillow and Craigslist are popular sites for posting rentals.
- Subscribe to an online tenant screening service (RentSpree: Online Rental Application & Tenant Screening) so that you can verify the creditworthiness and legal history of your prospective tenants.
- Talk to an accountant about how to document properly for tax deductions/benefits related to owning an investment property.
- Educate yourself with great resources to learn the ins and outs of owning an investment property. Here is a great place to start: Create & Build Wealth With Real Estate Investing | BiggerPockets
Renting your own property can be a great experience and financially rewarding! Need help evaluating which is the best option for you? Contact Sean Gilliam at 970-313-6706.
About the author: Sean Gilliam is a real estate agent with LoKation Real Estate in Northern Colorado. Sean can be reached at sgilliam@mylokation.com or by phone at 970-313-6706. For additional content see Sean’s Youtube channel or to search for properties see his web page.
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