Consider yourself the luckiest person on this planet if you’ve never listened to your tenant’s excuses for being late on rent payment, again.
Another interesting encounter; when you notice your tenant sneak in a pet dressed as a stuffed toy in a NO PET apartment. All this can make you want to sell your house and vow to never rent ever again.
But renting or selling a house has advantages and disadvantages of its own. So, before you make a final decision about your property, get to know all your options.
Things To Consider When Renting
Will It Generate Positive Cash Flow?
You need to determine if renting a property will produce positive cash flow or will it increase your expenses. Get an estimate rent that you can generate from renting your property, and then subtract all expenses and taxes that you will incur. If this number is positive, only then venture in to renting your property. Remember to treat your rent income as a ‘going concern’; this way you can measure its appreciation and depreciation in the years to come.
Account For All Expenses
Renting your home is no child’s play. You have to follow laws, compliance, and file for taxes before getting a tenant. Here is a comprehensive list of expenses that you might incur when renting a place:
- You need to pay mortgage. Calculate how much will the rent contribute for the mortgage payment, and have a back-up plan for months when the property remains un-rented.
- Insurance needs to be paid even when you rent your house.
- All repairs and fixes expenses are responsibility of the landlord.
- Rental income is subjected to 30% of withholding tax.
- You need to pay your property manager.
- Real estate agent commission
- If you advertise your home for rent, you need to bear that expense as well.
- You also need to pay for investigation and background checks of your tenants like, credit history etc.
Do You See Yourself As A Landlord?
Apart from lack of control, you need to mentally prepare yourself for delay in rents, numerous repairs and maintenance, and evasive tenant behavior.
You can hire a state agent to handle all this for you, but that means around 10% of your rent income goes into the agent’s pockets.
If you’re leaving the city for some time, the best way to profit on your absence is to rent your property. This way you will have a house waiting for you when you return and make some extra money.
If you own a house in a highly coveted location, you can also rent the property until you find the right sale offer.
Things To Consider When Selling A House
No Long-term Commitment
Selling a house requires a lot of contemplation and hard work, but the interaction you have with the buyers is limited to the transaction.
Once the sale is made, you can walk away with the money.
Managing repair requests at the middle of the night can be stressful and if you are managing two homes it can be an additional burden on your pockets. Moreover, if you are relocating to another country, selling is better than renting.
Avoid Fall In Market
Property markets are volatile to economic changes. Rent income is subjected to multiple factors, and this revenue can fall in the future. You can easily evade this uncertainty by selling your home.
Benefit From The Tax Law
As per US tax laws capital gains ranging up to $250,000 for single people and $500,000 for married couples, are excluded from capital gain tax. Keeping your tax bracket under consideration, you can save a sizeable amount from tax by selling your property. Hence, benefit from this law before it changes.
Support Your Down Payment
If you are moving or upgrading your home, you need significant amount of cash for the down payment of your new home. The easiest way to get cash is to sell your house fast In Jacksonville, and make a move.
We charge no commission fee, bear all the repair expense, and let you decide the closing date. We can sell any house within 7-days, so call (904)513-0229 and get fair cash value for your home.