Rent or Sell House

Rent or Sell House

Rent or Sell House | stylproperties

Rent or sell house? Somehow you ended up with two homes. Is selling one always the best option, or would it be more lucrative to retain the property and rent it out instead?

Rent or Sell House

When renting your property, a tenant will live in your home and pay you rent, which will go towards paying the mortgage on the property if you still have one. If not, then the rent will simply be additional income. As an additional investment stream, it can work well to reduce your overall financial risk, as it provides you with added income if you are unwell or lose your job. It can also act as a savings pot for you and allow you to build up a pot of money for vacations, renovations, or simply to act as a safety net. As house prices continue to rise, you’ll continue to retain an asset that will be worth even more in the future should you decide to sell.

How Do You Determine How Much Rent to Charge

According to The National Digest, Comparable rental properties in your area will influence the rent you will ask. “Your rental price should factor in your current mortgage payments, any taxes you pay on the property, any mortgage insurance premiums, any landlord insurance premiums, any association fees if your property belongs to an association, and an allowance for repairs, replacements, and maintenance. You will also need to calculate direct costs associated with finding a tenant, including advertising and tenant checks alongside accounting and property management fees.”

Renting Can Be a Good Option

Renting can be a good option if you still intend to sell. Perhaps you had the property on the market for a while, but it didn’t sell, or the offers you were getting were too low. Renting would allow you to wait until the market improves, and you can obtain the right price.

Other Considerations

You’ve seen strong home price growth in your area

for several years, and the market generally favors home sellers.

As they say in the world of stocks: buy low, sell high. You bought a house with the intent of building wealth. Sell it at the opportune moment, and you could push your potential windfall from this investment to the ceiling.

You haven’t met the two-year use test to exclude capital gains.

To avoid having to pay taxes on your home sale, you’ll need to have owned the home and lived there for at least two of the five years leading up to the sale.

So long as you meet these criteria, you can exclude up to $250,000 ($500,000 if you’re married) of “capital gain” on your primary home. If you’ve lived in the house less than two years, then you could be on the hook to pay capital gains taxes—which will be even higher if you’ve lived there for less than one year (review our breakdown of the capital gains brackets for more information).

Whether you decide to continue renting or selling your home, consider all of the options and weigh up the pros and cons. There are clear benefits to both approaches.

FREE information on How to sell your house fast

Styl Properties, Inc. is here to help homeowners out of any distressed situation.  

As investors, we are in business to make a modest profit on any deal. However, we can help homeowners out of just about any situation, no matter what!  There are no fees, upfront costs, commissions, or anything else.  We offer the simple truth about your home and how we can help you sell it fast.

Give us a ring. We would love to help you understand the process and to answer all of your questions. You can reach us at 402 999.0577

Photo by Phil Hearing on Unsplash

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