We know a lot of people are making a move in 2020, and many of you might be wondering whether or not you should sell or rent out your house. There are many factors to consider if you’re in this scenario which we’ll layout below.
Will renting my house generate cash flow?
First, you’ll want to determine if renting out your home will be profitable or not. Ideally, your rental will at least cover your mortgage, insurance, taxes, and maintenance costs.
Add up all of the expenses of renting and subtract them from the amount you’ll make from renting, including the tax breaks you’ll receive.
Your expenses will vary, but here are some to consider:
- HOA fees
- Insurance costs
- Credit checks on tenants
- Property management fees
Did you ever want to own a rental property?
Are you someone who’s always wanted to own a rental property? If so, renting out your home is a great way to experiment as an investor. Since you already own the home, you won’t have to take out an investor loan which typically requires higher down payments and has higher interest rates. Plus, if you find owning a rental property isn’t something you enjoy, you can always sell your home in the future.
Being a Landlord Has Tax Benefits
Owning a rental property also comes with some great tax benefits. These tax deductions and depreciation can help offset gains and losses elsewhere. You’ll want to speak with a tax advisor for more information on your specific situation.
Consider the Market
The housing market almost certainly will improve in the next few years. If there’s a good chance your home will increase in value, renting it out will allow you to keep the home and pay the mortgage.
Are You Coming Back to the Area?
If you’re moving to relocate, renting out your home can provide you with some security because you can always move back to your home if necessary. It’s also cheaper to rent out your home and move back than it is to sell your home and purchase another one.
Hiring a Property Manager
If screen tenants and staying up-to-date on laws and codes sounds daunting to you, consider hiring a property manager, especially if the home isn’t local. Property management companies, like Zenith, will list your rental property, screen tenants, collect payments, take care of maintenance issues, and more. We take the hassle and stress out of being a landlord.
We know deciding to sell or rent your home is a big decision that you shouldn’t take lightly. If you have any questions about our services, please feel free to give us a call.