You have done the hard work to remodel your fixer-upper and now you are ready for the payoff. However, you aren’t sure whether you should rent it out or sell it. This guide will help you decide.
Research the Advantages and Disadvantages
Selling your home provides you with a lump sum payment that you can reinvest. Selling also disposes of the home without any long-term commitment to the buyer. Renting provides you with a steady cash flow that lasts for as long as you can keep renting out the property.
When you rent, you retain the value of the asset plus the income generated by the rental. However, you also have added expenses to market and maintain the rental and you run the risk that the property will be difficult to rent out or that tenants may not pay their rent or damage your property. Additionally, you must take on the responsibilities of a landlord.
Research the Market
Not every neighborhood appeals to renters. If your home is located in a low-demand area, you may be better off selling than trying to rent. Alternatively, if sales prices are down in your area, you may want to rent the home until the market rebounds. Research any restrictions due to zoning laws or homeowner’s association rules that may affect whether you can rent your property.
Know What You Are Getting Into
Being a landlord isn’t just about collecting rent checks. It takes time and money to manage a rental property. Landlords are responsible for making major and minor repairs to keep their rental property in habitable condition. If you don’t have the cash on hand to pay for repairs, you could find yourself in a bind.
If your schedule prevents you from keeping up with all landlord’s responsibilities, you may need to hire a property management company to help screen tenants, take care of maintenance and repairs and collect rent payments. Alternatively, you can boost your property management skills by taking an online course through Property Management Made Easy.
Create a Marketing Plan
If you decide to rent your home, you need a marketing plan to attract renters. Be careful not to violate Fair Housing Laws when advertising or putting your paperwork together for the lease. There are many online platforms to help get your rental out there.
Hire Some Help
Trying to get a rental ready for new tenants is a big task. Make the job easier by hiring some professional help. If your home has some lingering maintenance issues, hire a maintenance person or look into hiring a property management company to coordinate and fix problems.
Many landlords aren’t aware that one of the many services a property management company offers is what is called Tenant Placement. This is where you hire a property manager to advertise, screen, handle the paperwork and place the well qualified tenant into the property and then turn everything over to you to manage. This is a win-win. You get a professional that has seen it all and can use their resources for advertising and marketing to get you the best candidate, and you get to manage.
The decision of whether to rent or sell your property isn’t an easy one. It comes down to how involved do you want to be with management, tenant issues, maintenance etc., as well as do you have the time, money, and interest to manage a rental. The benefit is the monthly cashflow and possible long-term appreciation. You can still have this by hiring a professional property manager who handles everything. However, for some people especially if the property has gained a lot in appreciation or you have inherited the property it may make more sense to sell and move on. It is advisable to check with your tax advisor to make sure you are making a smart financial move. Do your research and you will be able to make an educated decision about if keeping your property as a rental or selling is right for you.
Guest Contributor: Lucy Reed – Lucy created Gig Mine to help others dig up sharing economy opportunities in a user’s area, all in a single location, so users don’t have to jump between multiple sites. It’s the new and improved way to get a gig job!
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