Real estate investors often face the dilemma of whether to sell their property or rent it out. While selling the property is a great option for an immediate financial benefit, renting it out assures a more consistent cash flow. Besides, you can always sell it later for a higher price in a growing market like Columbus.
Since 25-30% of our clients at Bickerstaff Parham Property Management are new investors, we know very well of this quandary that accidental property owners face.
Here are some factors to help you decide whether you should sell or rent your Columbus home.
The Current Housing Market Trends In Columbus
It is very important to understand the market trends by analyzing real-time market data. You can check reputed sites like Zillow, Realtor, or PadMapper, enquire in your neighborhood, or follow newspaper listings for keeping up with the latest market trends.
Checking the demand for the kind of property you own is one of the most significant aspects to consider. Analyze if yours is a renter’s market, meaning that there is more demand for rental properties and more profit in renting than selling. If it is a seller’s market, meaning the market is favorable for sellers, you can consider selling it. Other than that, analyze factors like location, price per square foot, and curb appeal, as they can significantly impact the property value, regardless of whether you want to sell or rent it.
Calculate The ROI Before You Sell Or Rent
In order to decide whether to sell or rent, you need an accurate analysis of the returns that you can earn by selling vs. renting. Factor all the expenses of renting it out like the maintenance fees, legal fees, property taxes, property management charges, HOA fees (if applicable), and mortgage insurance. Compare it to the receivables, including the tax deductibles and rental income.
Also, analyze the costs involved in making the property ready for sale, such as renovations, advertisements, or showings. Compare the potential ROI in both scenarios to decide the future of your investment.
Are You Prepared To Become A Landlord?
Becoming a landlord can be very challenging, especially if you have never done it before. You need to keep the property in a habitable condition, create a comprehensive lease agreement with important disclosures, and comply with anti-discrimination laws and the state rent rules.
Besides, there are other factors like answering tenant requests, getting timely repairs done, managing evictions, advertising and turning over the property, and screening tenants. If you are sure that you can handle all these tasks effectively, you can decide to rent the property.
Having a trusted property management company by your side can be a game-changing factor here, so take that into account as well.
Your Financial Goals
Knowing your financial goals is of utmost importance. Analyze whether you need money immediately or in the near future for re-investment, or you are willing to opt for a passive source of income over the long-term.
If you need a lump sum amount of money right away, then you can opt for selling the property. But if you are looking forward to gaining long-term profits, or generating a source of income after retirement, then renting out the place can be the better alternative.
If this seems like too intimidating a decision to make on your own, consider consulting a professional property manager. A trusted agency like Bickerstaff Parham Property Management, which has been in the real estate business for over 20 years, can help you figure out your investment goals and decide accordingly, to help you gain maximum ROI.
For more information, talk to one of our expert agents today!