Updated December 23, 2021
To rent or sell your home? That is the question! The answer depends on a variety of factors, including how the market is doing, how much work you want to put into your home upfront versus over time, whether you have enough equity in your home or if you are under on your mortgage, among other things. Jacksonville property managers will be exploring both reasons to sell, as well as reasons to rent, below, in hopes of helping you decide whether renting or selling is the right answer for you.
Questions You Should Ask Before You Sell Your Home
There may be a good reason to sell your home. To find out which way makes more sense, property owners should ask themselves a few questions. First, let's look at each scenario more in-depth.
Is the Market Hot for Selling Your Home Right Now?
When deciding whether to rent or sell a home, the market conditions are a significant factor to consider. If the market is doing well and prices are on the rise, it may make more sense to sell your home and take advantage of the current market climate. This also holds true if you need to get out of your home before the market changes and the value of your home declines. However, other factors come into play when it comes time to decide whether or not to rent or sell a home, and each factor must be evaluated individually.
Do You Want to Stay In Your Home?
If you want to stay in your home for the long haul, selling may not be the best option. Selling a home requires a lot of work, including fixing up and repairing the property, staging it to make it look as appealing as possible to buyers, and finding a real estate agent to handle the sale. If you're not willing to put in that effort or don't have the time to do it, then renting may be a better option.
When you rent your home, you just need a great renter. You'll want to put in a little effort to make sure the house is attractive to the best renters. However, this type of work doesn't usually require the same outlay of capital as a major renovation to get it ready for the market and sell it.
Do You Want the Hassles That Come with Being a Landlord?
If you aren't interested in the "hassle" of being a landlord and are in a place where the extra revenue stream from renting wouldn't make a huge difference to you, it may be easier to sell your home. Being a landlord can come with many hassles, like dealing with tenant complaints, repairs, and other issues. It's not for everyone, and it can be especially tough if you're not interested in it or don't have the time for it.
However, if you're willing to put in the effort, there are ways to make being a landlord easier. One way is to hire a property management company to deal with day-to-day operations. Hiring one of the best residential property management companies to take on the property management services of your rental can take a lot of the stress out of being a landlord and let you relax a little bit more. For a few extra dollars a month in management fees, a company can provide property management services like rent collection, so it's one less thing you have to worry about.
Do You Want to Just Walk Away?
There is certainly something to be said about the freedom that comes from just selling your home and no longer being tied to it. All of the potential issues from renting your home out are avoided by just selling it instead. However, there are also some downsides to consider. For example, selling your home is still stressful, and there will definitely still be work involved. However, when it is all over, you get a check for your home, and you get to move on.
Additionally, if you are relocating to another state, selling can be even more beneficial. It is very hard to understand the emotional burden of having two homes until you have experienced it. Dealing with rental properties and property maintenance in the middle of the night, especially if you are in another state, is not enjoyable!
Reasons to Rent Your Home
We've discussed some valid reasons for selling your Jacksonville home. Now, let's take a look at some of the reasons why you may want to hang onto it and convert your home into an income-producing property. Here are some questions to ask yourself.
Would You Take a Loss On the House if You Sold Now?
If the market where you are trying to sell takes a turn for the worst and selling your home would result in a loss, you may want to hold on to the property and rent it out until you can actually make a good profit from selling it. The combination of more equity from paying your mortgage down over the rental period time and, hopefully, increased real estate market values can give you the option to sell your home for a more significant gain later (while still giving you the opportunity to keep renting it out if you find that the additional revenue stream is working out well for you).
What happens if you keep the home and avoid a loss from selling? Consider a couple of benefits when hanging onto the property and converting it into a rental home!
- Renting allows you to earn income while waiting for the market to recover. Assuming that you have a long-term outlook, you can keep the unit occupied with tenants who are paying you rent, and the property you are looking to rent is in a neighborhood where home values tend to appreciate over time, you should see very strong returns from renting. When renting out your property, you have two sources of wealth creation: The money you get from rent payments yields a net profit each month. 2. The property's value, which grows over time.
- You want to build an investment portfolio. When you're looking to get into the investment game, renting out your first home is a great way to start. By putting down a 20% down payment on your new home, you can afford to rent out your old one—and that's a key part of building an investment portfolio. Not only will you have a place to live, but you'll also have a property that's generating income for you. And, as your portfolio grows, you can use that income to help finance the purchase of even more properties. It's a win-win situation!
Being a rental property owner by keeping a home you no longer live in can be an excellent way to build long-term wealth!
Work With One of the Best Property Management Companies
The decision between renting and selling your home should not be taken lightly. This is a significant life decision, and hasty decisions are often made without thoroughly considering the pros and cons of renting versus selling. If you are in a hot real estate market and you can turn a nice profit now instead of later, it might make more sense to sell it. On the other hand, there are also some benefits from keeping a house and turning it into a rental property.
Hopefully, the information presented here will help you make the right choice for your current life circumstances. The choice between renting or selling a home often boils down to an individual's unique situation. If you are considering renting, don't hesitate to get in touch with Spectrum Realty Services for a free consultation if you want to learn how much your home will rent for, as well as learn about the reasons that hiring one of the best local property management companies may be beneficial for you!