Should I Rent or Sell My Home?
Are you asking yourself, “Should I rent or sell my home?” In this market, there is no incorrect answer. Inventory is low and prices are up for both sales and leasing. So, as a seller or landlord, you simply can’t go wrong.
Here are four important questions to ask yourself before leasing a residential home or condominium.
- Does it make financial sense?
- Will a tenant take good care of my home?
- Do I want to be a landlord?
- What are the liabilities?
The Finances
Determine your price point, which can be as high as 20% over market value right now. Let’s say you lease you home or condo for $10,000 a month. Calculate your expenses:
- mortgage payments
- real estate taxes and insurance if you don’t have a mortgage,
- income tax on $120,000 and
- reserve fund for repairs and maintenance.
If the net profit after expenses works for you, then you have your answer.
Care of Home
It’s a well known fact that tenants do not take the same level of care of a rental home as an owner. That being said, much depends on choosing the right tenant and not basing your tenant selection solely on rent price. Definitely screen a tenant for income, credit and criminal background. Call their previous landlord to inquire about them. Consider purchasing a home warranty plan and collecting two months security and pet deposits.
The Landlord Job
If you don’t want to hire a property manager, you must assume the job of dealing with tenants. Setting the tone for an excellent landlord-tenant relationship is critical. It’s best to set boundaries in the lease by establishing responsibilities for everything. Leave nothing to chance or assumption. And try to be fair, reasonable and responsive to the tenant.
Professional Advice
Obtain financial advice from an accountant and legal advice from an attorney about potential liability and how to best protect your assets. Rental properties are frequently placed in an LLC.
Income properties can generate some serious cash flow. If your in the market to buy, sell or rent a property, I’d be happy to discuss your particular needs anytime. 305.898.1852 Wellins.D@ewm.com
On the flip side, this is a must read for tenants on Six Tips to Winning the Rental Bidding War.
