Are you looking to grow your family and your current home is unable to provide for your needs? Or are you looking to upgrade into a home in a better location? Whatever your reason for moving out of your current home may be, there are more things to take into account. In particular, you have to decide on what you are going to do with your current home.
There are two viable options available: you can rent it out or sell your house. There are certain pros and cons with each option and you can decide on what the best move is with the help of an expert Colorado Springs real estate agent. With the knowledge and experience of an agent, you can determine the right choice that will bring in the most profits.
Should you sell or rent out your house? (Image Source: Unsplash)
The choice might be straightforward but it is far from being one. There are several factors to consider and your income potential can also vary significantly.
Why Consider Selling Your Home?
Selling your home is one of the options available if you vacate a property. It is an attractive option because you can earn a lump sum equivalent to the market value of your home. There are many reasons why you would want to consider selling a home, such as the following:
- If you have determined if the property is not going to make money as a rental, it is better to sell it. Or, if you have no access to a reliable property manager, it makes more sense to sell your home.
- You can get immediate access to cash if you choose to sell a home. This is one of the primary benefits that you can get when you choose to sell your home with the help of a Colorado Springs real estate agent.
- You can also utilize the help of a real estate agent to ensure that you can sell your home for a competitive price. By selling your home at a competitive price, it can offset any commission that must be paid off to your agent.
- When you decide to sell, you must also bear some expenses to prepare it for sale. You have to conduct home inspections and stage your home to make it more appealing to potential buyers.
Why Consider Renting it Out?
Sell or rent out your home: Which is the better choice? (Image Source: Unsplash)
For anyone who owns a property as an investment, renting it out is often the first option. Owning a rental property is a great way to generate a steady stream of income. A lot of reasons why property owners choose to rent out their house is to ensure a steady flow of cash.
When you get your payment from your tenants for rent, you can use that towards the monthly payment of your mortgage. In a sense, you are not taking your own money to pay for the property. Instead, you can use whatever your tenants are paying you to cover that expense.
Once you have paid off the mortgage, you can treat your rental payment as your income. Choosing to rent out your house is a good option if you want to diversify your income. If you own other types of investments, renting a property is a good way to provide an additional income stream.
This will reduce your financial risk and also improve your cash flow. If you lost your job or your business earnings fluctuate, you will have a steady source of income to pull funds from. But while the income potential of a rental property is promising, it is important to consider the cost of renting.
These are some of the expenses that you should be aware of:
Mortgage payment
You need to compute the principal and interest payments (versus your rental income).
Property taxes
The tax you would have to pay will vary based on your area. It is important to account for this when you rent it out as it is deducted from your overall rental income.
Landlord insurance
This is an important investment for rental property owners to ensure you are protected from damage caused by tenants (to your property).
Maintenance
You need to allot maintenance expenses for your property to ensure that it is in good condition. Maintenance is a must because you want to be able to attract more tenants and lower your vacancy rate.
Profitability
The most important factor to consider when you decide to rent out your property is to know its rental profitability. You can look at the existing rental property postings within your neighborhood or city. This will give you a fair estimate of the rental cost in your area.
You can also use any market comparison tools for real estate to assess the average cost of the rental. It is also recommended that you research the historical rental trends in your area to see if there have been any price increases.
Revenue
If there is a price increase, it is important to take advantage of that to ensure that your rental revenue is higher than your expenses. Also, if you are not generating profit immediately, do not fret. This does not mean that your rental property is losing.
You must also be aware of the existing trends in the rental market as there are times wherein it is low. Or, in some cases, you are still paying off your mortgage. But when your mortgage is paid off, you should see your revenue improve.
Work with a Colorado Springs Real Estate Agent
Colorado Springs Real Estate Agent Tip: Should You Sell or Rent Out Your Home? (Image source: Unsplash)
Deciding whether to sell or rent out your house will be determined based on your long-term goals. As already mentioned, there are certain benefits and drawbacks for each choice. It is important to evaluate each option and to weigh out what those benefits and drawbacks are.
If you need help with organizing your goals and sorting out your options, you can talk to an experienced Colorado Springs real estate agent like Brian Boals. As part of the Remax realtor Colorado Springs team, you can guarantee that Brian Boals has the experience and expertise to help you make the right decision.
In particular, you can leverage this expertise in the Colorado real estate market to your advantage. You can utilize our free home market analysis so you can determine your home’s value against other properties in the market.
If you are planning to sell your house, this is a valuable tool that will enable you to price your home competitively. If you are ready to get started on selling your home in Colorado Springs, you can go to this page.
If you are not sure where to start, you can give us a call at (719) 459-9955 or email us at brianboals@gmail.com. Our Colorado Springs realtor team would be happy to assist you if you decide to sell your home (or if you are looking for a property to invest in).