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Should You Rent or Sell?

When you’re ready to move on from your current home, you have two options: Sell or Rent. There are several factors you should consider in making your decision, including, but not limited to the following aspects.

Your Plans

Are you moving away from the area, and if so - is it permanent or do you plan to come back in a few years? If returning, renting may be a great solution for you and can help you avoid capital gains tax from the sale of a home.

Your Finances and the Rental Market

Can you rent a home in your area for enough money to cover your mortgage payment, insurance and expenses for the home? As you collect monthly rent from your tenants, if you have enough expenses to offset it, you may not even owe taxes on the rent. Rental property can be a great asset and provide you income in your retirement, either in collecting monthly rent or if you sell, you can covert your equity into a lump sum.

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Your Tax Situation

If you rent instead of selling, you can depreciate it for tax purposes. Also, depending on how much you make once you finally sell the home, it can also benefit your tax deductions.

Are Ready to Be a Landlord?

Becoming a landlord typically means you still will be maintaining your house. Will you allow pets? What method will you use to collect rent? How will you screen prospective tenants? When someone lives in your home it receives wear and tear, along with your yard. If you can’t live with this reality, then renting may not be for you. Repairs are an important part of being a landlord, who will take the calls and make the necessary repairs? If DIY isn’t your thing, do you know craftspeople readily available to handle repairs? Can you evict a tenant who fails to pay, or would you not have the heart to send them packing? You can save yourself many of these headaches by using a qualified, professional property management team like Call It Home.

Your Home’s Condition

Renters versus buyers are more likely to overlook outdated fixtures and features because renters are just passing through. Whereas if you can’t afford to invest in improvements, and your home is out of date (not in a good “retro-chic” way) then renting may be a good choice.

Additional Considerations

Do you need all the equity from a home sale, to be able to afford your next house? If you don’t need all the equity in your home for a down payment, you may be able to take out a home equity loan on your rental home and use the proceeds as your down payment, and still keep your first home a rental.

In summary, renting residential real estate is typically a terrific investment. However, it is not without its challenges. Be sure you want to be an investor, and have the abilities or management support to make it work for you.

Contact Call It Home today for help to review selling or renting your home and/or utilizing our professional property management services.