Property owners are frequently asking us whether they should sell or rent their homes. While the real estate market overall is improving and property values are beginning to climb again, we always advise investors to keep their homes as rentals if they can. You’ll find there are a lot of good financial reasons to hold onto that asset and not get rid of it.
A well managed property can bring an owner positive cash flow benefits. You’ll get a steady rent check every month and you can count on a tenant paying most or all of your mortgage for you, which makes a rental property a very good investment. You also get to keep the tax advantages of property ownership. You can deduct your expenses and interest when you keep your home as a rental.
One of the expenses you can deduct is the fee you pay your property manager. This means that any expenses you incur in maintaining that rental home will help you out at tax time. Also, you don’t have to pay any capital gains taxes when you rent out your home, as you would if you sold that property. When you sell, you also have to absorb the other expenses involved in the sale, including repairs or upgrades to the property as well as the commissions for your real estate agent.
Sometimes, property owners think it’s a better idea to sell because it takes too much time and work to care for a property when you’re renting it out. If you continue to rent your home, use a professional property manager so you can minimize that time and effort. A good property manager will take care of all tenant related issues, and will also stay on top of the legal requirements of renting out the property. That includes fair housing laws, habitability issues and all required compliance. Your property manager will protect you and your investment. You’ll have someone to answer the maintenance calls and ensure rent is collected in a timely manner.
If you’re trying to decide whether to rent or sell, we encourage you to consider the benefits of renting out your property to a good tenant. Please contact us at Stokley Properties for more information, or if you have any questions.