Sometimes, we’ll talk to clients who want to know if they should sell or rent out their Contra Costa investment property. Obviously, the decision depends almost entirely on your particular situation. You might need the cash that a sale would provide in order to put a down payment on a new house. Or, you may be leaving the area with no plans to return, and you just want to make a clean break. Those would be good reasons to sell.
However, I always tell clients that if you don’t need to sell, don’t sell. Real estate is still the best investment, and a great place to grow your money.
Deciding to Sell Your Investment Property
If you do want to sell your home, or you have come to the conclusion that you must sell your home, it’s still a good time to have your house on the market. It’s currently February in 2019, and you should be able to get a good price on your home if it’s well-maintained and attractive to buyers. We have had at least eight years of steady equity growth. Will this go on forever? Of course not, and no one can predict when the next recession will be. However, if you do sell your investment home now, you’ll probably be able to count on multiple offers. It’s a strong market.
Deciding to Rent Out Your Investment Property
Even though we are currently in a strong sales market, my advice would still be to keep your property as an investment rental. Depending on your equity, I’d even recommend that you refinance the property, and then take the cash out and buy more investment properties.
The real estate market in Contra Costa is expensive. It’s difficult to enter this market with prices high and down payment requirements rising. So, if you already have a real estate asset, it makes sense to keep it. My perspective is that you should hold onto your real estate. Keep it, because it provides a great source of income and it helps you to build your wealth.
When you rent out your home, you have a tenant paying down your mortgage and contributing to the cost of your other expenses such as taxes, insurance, and HOA fees. This is a pretty good deal for you, since you ultimately maintain control of the asset. Property is also tangible. It’s not like stock investments. You may want to live in this property in 10 or 20 or 30 years. It might make a nice retirement home one day in the future, so why not hold onto it?
There are also tax advantages to renting out a home. You can use depreciation, expenses, and the cost of professional services like property management to reduce your overall tax liability.
Deciding to rent or sell your property is a personal decision. We’d be happy to help you do the math and figure out which is the more profitable option for you. If you have any questions about your investment property or how professional property management can help you, please contact us at Stokley Properties.