Not sure if you should sell or rent out your home? We at Florida Property Management & Sales can help you decide with our one-time consultation service. If afterwards you’d like us to help with the next steps, whether in regards to selling or renting, we can help. We can help you determine what’s best based on your goals and the current market conditions.
Have you landed a new job and are considering relocating? Or maybe you have a burning desire to live somewhere else? Or could it be that you have found your dream home and are looking to seize an opportunity?
Whatever the situation is, deciding whether to rent out or sell your South Florida home can be agonizing.
If you choose to rent it out, managing it could turn out to be stressful and a significant time expense. Renting out includes finding a tenant, caring for the unit, and dealing with tenant issues. On the other hand, selling it too quickly can turn out to be a risky affair. You could, for instance, end up forfeiting a sizeable amount of equity in appreciation rates.
So, which option is best for you? Well, this article may help you answer that!
“Should I Rent My House or Sell it?”
Take a look at both options regarding your home to decide what’s best for your situation. First, the following will showcase what renting out your South Florida home means:
Renting Your South Florida Home
1. Is it going to be profitable?
When it comes to investing in rental property, cash flow is a priority. A good investment is one that is able to generate a positive cash flow. Otherwise, you face risks if you experience negative cash flow from your investment.
Cash flow is what you get by subtracting the gross monthly income from operational expenses. Examples of operational expenses include the mortgage, repairs, taxes, and insurance fees.
Please note that expenses will keep varying. Generally speaking, though, expect operating expenses to be 50% of the gross rental income. So, if your rental property can make $30,000 per year in gross rents, it’d be safe to assume that $15,000 will go towards expenses. And this isn’t inclusive of mortgage payments.
2. Who is going to manage your property?
Being a landlord isn’t for the fainthearted. It can be stressful and time-consuming. That’s because you are never going to have control of who you rent the property to.
If lucky, you may land tenants that abide by the lease terms, including paying rent on time. However, sometimes you may land tenants that wreck the place and never pay rent on time.
Moreover, even when you’ve got great tenants, you’ll still have to deal with maintenance and tenant issues.
Luckily, you may be able to get off the hook by hiring someone else to manage the property on your behalf. A comprehensive property management company can help you in all aspects of property management, from leasing to rent collection to property maintenance.
3. Is there a demand for rentals in the area?
Is your property located around colleges, in luxury areas, in urban areas, or in an up-and-coming neighborhood? If so, chances are that the demand for rentals is high.
Renting your property in such a neighborhood can guarantee you a decent flow of income. What’s more, you’ll still be able to create wealth through increasing property appreciation rates.
Selling your South Florida Home
The other option to consider is whether to sell your South Florida home. The following are a few things you may want to consider:
1. It can be relieving.
Selling your home comes with a certain level of freedom. You can avoid all the burdens that come with renting out your South Florida home.
Granted, home selling has its fair share of stress. However, when it’s all over, you’ll receive the payment and move on.
If moving to a different state, selling your home can be even more advantageous. The emotional burden of having two homes can be difficult to bear. The last thing you want is having to be woken up at 2am by a tenant because of a maintenance issue while living in another state. A property management company would be even more beneficial in this case.
2. The housing inventory is low.
In a seller’s market, home buyers have limited supply to choose from. This means that your home may be able to get a lot of attention from prospective buyers – so long as you’ve priced it well.
Needless to say, when demand is high, price goes up as well. This means that you may be able to maximize the value via a bidding war.
However, how do you know when the real estate market is a seller’s market? Well, you’ll need to keep tabs on it. Go to your local Realtor association website and check the market report of the most recent months.
How does the inventory change year over year? Ideally, the lower the drop the better.
You’ll also want to look at property appreciation rates from the last 10 years or so. Is there a strong price growth in the last several years? If so, it could be a telltale sign that it’s a good time to cash out.
3. Your home has a big chunk of equity.
Found your dream home and your current one has got a ton of equity? If so, selling your current home can help you reach your goals a lot faster than you would renting it out.
According to a report by CoreLogic.com, the average homeowner gained nearly $10,000 in home equity over last year.
That being said, there is more that goes into calculating the actual profit from selling your home. Common costs of selling a home include home improvement costs, real estate commissions, home staging costs, and closing fees.
Conclusion: Should I Rent or Sell my House in South Florida?
As you can probably guess, there is no straightforward answer. As a homeowner, you have to consider various factors, including monetary and lifestyle ones. To help you make the right decision, it may be in your best interests to hire a professional.
Florida Property Management & Sales has served hundreds of clients over the past 40 years. We understand the local market trends and are best placed to provide you honest, professional advice. Get in touch with us today to get started. You can reach us by dialing (954) 752-4800.