It goes without saying that the real estate market has been full of surprises over the last few years, with record-breaking high prices nationwide, including here in Northern Virginia. Relocation for a new job, moving to be closer to family, making the switch from a city to a suburb, or some other factor has made many homeowners consider selling their homes in pursuit of purchasing their next property. These high housing prices aren’t just for hopeful buyers; renters are feeling the same inflation in housing prices, with rent pricing making the news daily. With these record high rent prices, many homeowners ask themselves, “Is selling my home really worth it, or should I rent it out?”
Figuring out what the best choice for you depends on numerous factors, which we will discuss throughout the course of this article.
Dilemma 1: Why You Should Rent Out Your Home
Renting your home will help you build a real estate portfolio if you don’t already have one. Keeping your house will allow you to continue to build equity as you pay down the mortgage, if you still have one, with the proceeds from the rental income, or make pure profit after paying for management fees and taxes. Maintaining ownership of your home will allow you to continue to gain equity over time as the housing market naturally increases over time, helping you build generational wealth. Renting can change your home from financial liability to a profitable asset for you. If your home meets any of the following statements below, you might want to consider renting it instead of selling.
Your home is in good condition in a sought-after area
You want to be a landlord
Rental demand is high in your area
Your house offers amenities renters are seeking
You owe more money on your home than you can make selling it
The local home buying market isn’t want you want or were expecting
You might want to move back to the home in the future
Considering all of the above will help you to decide if renting your home makes financial sense. Before you make the final decision to rent out your home, you will need to consider what being a landlord will mean for you, especially if your next move will be out of state.
Dilemma 2: Selling Your Home Equals immediate Cash and More
If you need immediate cash, fewer loans against your credit, or simply don’t want to deal with the hassle of owning two or more properties, then you should sell your home. Another great reason to sell your home is if you live in one of Virginia’s more competitive housing markets - this will allow you to get a higher asking price for your home and inevitably a higher profit depending on what you still owe on your mortgage. Speaking with a local real estate agent who understands the current market, your neighborhood, and your situation will be a good first start. You want to make sure that before you sell your home that it will be financially beneficial for you not only today but for the coming months and years ahead. What are some other reasons to sell your home?
You are downsizing and need to cut back on expenses
You’re nearing retirement and want to liquidate your assets, not grow them
You need more cash flow to fund other debts or a big move
The buyers market in your area is hotter than the rental market
You never want to be a landlord, and the risks that are associated with it
While these are just a few reasons why you might want to sell your home instead of rent, they should also be considered. Take into account how you feel about becoming a landlord and what your long-term plan is for owning or not owning your home.
Dilemma 3: What Could Go Wrong If You Rent Out Your Home?
Finding trustworthy and respectful tenants to rent your property to is one of the most challenging tasks landlords face. The difference between a good tenant and a bad tenant can make or break your investment and cost you thousands of dollars. Screening tenants, answering emergency calls, lawn maintenance, appliance repairs, pet damage, and keeping accurate records can be a challenge if you don’t have a ton of experience with rentals. A variety of other challenges face landlords, including late rental payments, missing rental payments, evictions, and major property damage. Hiring a property manager can help you to mitigate these risks. Why should you hire a property manager to look after your asset?
You’re too busy and already have a number of personal and professional demands on your plate.
You’ve moved out of town, out of state, or across the country and can’t visit the property every time something goes wrong.
You don’t want to be heavily involved and want to take more of a hands-off approach to managing your property.
You don’t have experience with dealing with tenants, their issues, rental agreements, or renting laws.
If any of those reasons to hire a property manager or property management company in Northern Virginia fit your situation, then reach out to us to find out how we can help you manage your home as you make your next move without worry. Years of experience, dedicated professionals, and a great staff help us to ensure that the rental process of your property will be as smooth as possible no matter how far you end up living from your former home.
Whether you decide to sell your home or rent it out, make sure that you are making the decision that is not only best for you but for your family and wallet for the coming years. Owning property is the easiest way to build wealth - starting with your former home might be just what you need to start growing a thriving real estate portfolio.