Owning a rental property can be a great source of investment and it can also serve as an ideal retirement vehicle. When you’re trying to decide whether you should sell or rent out a property that you have, there are a few specific things to look at.
The first thing you need to do is to look at your long term goals. A rental property provides you with passive income, and later on as the property appreciates, you can use the equity that you have built up in the home. You can also do a 1031 exchange with your property when you decide you’d like to buy another one. Or, as time goes on and your property appreciates, you can use the equity to buy more property. Consider these benefits when you’re looking at your financial strategy and deciding whether you want to put your property on the rental market.
Renting out your home is a great way to earn income, but it also comes with costs. You’ll have to evaluate whether you can afford the property if it’s empty for a month. That’s a big factor. In addition to covering your mortgage payment during vacancy periods, you’ll also have to be prepared for taxes, insurance costs and a healthy maintenance reserve.
The beauty of owning a rental property is that the rents go up over time. That means you’ll have the opportunity to earn more rental income over time, especially when you keep the property in good condition and you market to excellent tenants. Your rental property will also appreciate over time.
When you’re trying to decide whether you want to sell your property or enter the rental market, factor in these considerations. You’ll also want to be sure that the bank will allow you to rent out a property that you’re financing through them.
For more information, please contact us at SunWorld Group Property Management, and we can help you determine if it’s better to sell or rent out your property.