Published December 19, 2019
Updated March 23, 2023
The decision to sell or rent can quickly get Shakespearean: "To rent or not to rent, that is the question." For many folks, the issue is not a question at all: selling is the traditional route, and they're sticking to that.
However, even if you sell a home for a take-home profit of $100,000, you could still be over $15,000 richer in five years if you rented it out for just $1,200 a month after careful rental analysis! However, for some, the immediacy of the income is necessary.
Each situation is as unique as the home involved. So, if you're asking, "Should I rent vs. sell my home," here are some considerations to help you decide!
What Are Some Reasons to Sell?
Selling is a reliable option when it's time to move, and you need to make a decision about your current home. Here are a few excellent reasons to go that route.
The Market Is Good, and You'll Get a Good Return
For many homeowners, a sudden influx of cash is too good to pass up. When the market sets the stage for a hefty profit, it makes good sense to sell your home.
With an account filled with liquid cash, other opportunities open up—including investing in Daniel Island real estate or putting more money down for your next single-family home or condo purchase.
You Don't Want to Be a Landlord
Some homeowners in Daniel Island—no matter how good the returns—don't want to be landlords. They see it as a hassle and unnecessary addition to an already hectic schedule. There are also the challenges involved in finding tenants and keeping them happy.
If this is your biggest obstacle, you may want to find property managers in the area to manage your home as a rental. They can take care of every detail, from finding tenants to collecting rent and making sure you get paid.
You Feel It's Time to Walk Away
Every home has a story—and some are less pleasant than others. Often, the process of homeownership itself dominates the narrative, and it feels great to shed some of the bad memories. If you need a home-stress purge, selling can provide the closure you need.
Many homeowners are also able to find some closure when they transform their home from one they own to one they rent. The final decision will depend on what feels best for you and your family.
Good Reasons to Rent
What would encourage a homeowner to turn their house into a rental home after moving out? Of course, selling can be a good option, but often, renting out the home can be a more profitable option long-term.
The Market Isn't Good Enough to Make a Decent Profit
When it comes to Daniel Island real estate, the market can be finicky. If the market isn't handing you a great deal, you'd be much better off renting your home.
As mentioned at the outset, the rate of return for renting your home very often catches up with—and surpasses—the profit from a sale in as little as five years. So even if you're looking at an acceptable profit, you may be better off turning your home into an income-producing asset.
If you're not sure how to turn your property into a rental, you can consult a property management company serving the area.
Renting Equals Earned Income While Waiting for the Market to Rebound
Given the fact that housing prices went up an average of 5% since last year in the United States, the chances are that if you can't net a substantial profit now, you will be able to later! When faced with this situation, many homeowners choose to rent out their homes while they wait for the housing market to favor a sale.
In effect, renting your home until the market is in your favor increases the return on your investment (ROI). Property owners boost their ROI by the residual income the house produces. It's like getting paid to wait!
You Want to Build an Investment Portfolio
While relatively few people choose to become full-time investors right off the bat, it never hurts to use your assets to make money.
Homeownership gently bends the rule of "you need money to make money." As a result, your home can be transformed into a powerful investment vehicle—even if it's currently a nagging liability.
To use your home as the launch pad of your investment venture, you can take the following steps:
Find a property manager and have them perform a rental analysis.
If the rental return is high enough to cover your expenses, make a plan to transition to your next home.
Assess the need for any repairs to the house that could make it more attractive to tenants.
Make any necessary repairs and prep the home.
Use a property management company to help you find tenants.
An investment portfolio can be a powerful financial vehicle. With careful analysis and good management, not only can the return on the investment help take care of your daily living expenses, the equity the home builds can be used to acquire more properties. Soon, you can have several properties that each provide a handsome return and bolster the net worth of your portfolio.
A Residential Property Management Company Gives You an Edge
Should you rent or sell your home? Consulting a property management company can help get you solid, concrete numbers as to how much you are likely to get if you rent out your property vs. selling it in the current market.
If you want to learn how much your home will rent for, get in touch with the expert property managers at Charleston Property Company for a Free Rental Analysis! We can also talk with you about what it looks like to let a property manager operate your property as a rental on your behalf.