Your house has been on the market for weeks (or maybe months) without any real leads on a buyer. You’re getting frustrated, and you’re ready to try something different.
You’re probably wondering: “Should I rent my house instead of selling?”
We hear it all the time! When the real estate market slows down, sellers start considering whether it’s better to sell or rent. Especially in the Charleston market, where many sellers are in a hurry to sell due to military relocation.
So here are a few factors to consider when deciding whether to sell or rent out your home.
Your Circumstances & Goals
Before anything else, you should think about your personal circumstances and goals before making this decision.
If your only goal is to have the funds available for the purchase of your next home, it’s probably for the best that you stick it out and wait for your home to sell.
But if you hope to invest in real estate in the future, or you’ve thought about building passive income, it may make more sense to hang onto your home and rent it out.
Current Mortgage
How long have you had the mortgage on your current home?
If it’s been a while, you may have bought at a much lower property value and interest rate. If this is your situation, congratulations! You are in the ideal position to rent out your property instead of selling.
With properties renting out at higher rates than ever, your low monthly mortgage payment means you’ll make a higher profit when you choose to rent.
The State of the Market
Is it a buyer’s market or a seller’s market?
You may not plan to invest in rental property long-term, but if you are reading this during a time when the housing market favors buyers, it may still be beneficial to hold onto your property until the market changes.
And if you’re going to wait to sell anyway, you may want to consider renting your property to make a little extra income–or cover the mortgage!
Expenses
But in some cases, the expenses of renting your home could cancel out the income (or even surpass it).
Make sure that you do the math (preferably with the help of a professional, like a property manager or your financial planner) before making your decision.
Figure out the current rental market value of your home, then factor in taxes, your mortgage, property insurance, small common maintenance costs, and even larger repairs that you know will be needed in the coming years.
If the numbers make sense, you can start the process of getting your home ready to rent out!
Added Responsibilities
It may sound like an easy side hustle, but there are a lot of added responsibilities that come with having tenants!
If you want to invest in rental property, you have to be willing to:
- Advertise your open property
- Vet potential tenants (while following all housing regulations)
- Keep up with paperwork like leases
- Collect tenant payments
- Manage maintenance requests
- Handle miscellaneous tenant issues
- And more!
The good news is, if all of this sounds overwhelming, you can hire a property management company to save you time, money, and stress. But it’s important to think about these responsibilities before making the decision to rent your home.
Good Luck!
If you are on the journey of deciding if you should rent or sell your house, we wish you the best of luck! Legacy Pines would be honored to support you along the way. Reach out at info@legacypinespm.com. to speak with a property manager.