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307 E New York Ave

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Should You Sell Your House or Rent It Out?

You buy a house but then you need to move for some reason. Maybe it’s by choice or maybe your work is forcing you to relocate. Either way, what do you do with the house?

Owning two homes can work and be profitable if you decide to rent out the previous home. By keeping the house, you can begin building serious wealth through cash flow and equity.

But how do you know if that’s the right move?

Should you just sell the house and move on? Or should you rent it out? As with most real estate questions, these are not universal “right or wrong” questions, but once you understand the options, you can make the best choice for your situation.

Consider the 5 factors below when making your decision. 

1. Will This Property Cash Flow?

The first thing to look at when deciding whether to rent out your house or sell it is to look at the math. I know, math was likely not your favorite subject in school, but luckily it doesn’t require anything more than a fifth-grade mind to understand real estate investment math.

First, ask yourself: Will this property produce positive cash flow?

In other words, when this property is rented out, and I deduct all the expenses associated with the property (mortgage, taxes, insurance, utilities, management, vacancy, repairs, HOAs, etc.), will the property produce a monthly profit or a loss? If you are looking at a loss, consider selling.

2. What About My Return on Investment?

Consider how much you would profit if you sold the property today, assuming you’d lose around 10 percent to agent fees, closing costs, and other sales expenses. If you would make little or nothing, it may be advantageous to hold onto the property, waiting for the market to improve over time. This is especially true if the property will provide positive cash flow in the meantime.

If you would make a profit by selling, consider your return on investment. For example, if you could make $100,000 in profit by selling your house and would only achieve $1,000 per year in cash flow, that’s a 1% return on investment. I would much rather take that $100,000 profit and invest it in something else that could give me a higher return.

3. Consider the Taxes

Our US Government does a lot of things I don’t agree with, but one thing they do that I absolutely love is the potential exclusion from paying capital gains tax on the sale of your primary residence.

Normally, if you sell real estate and make a profit, you’ll have to pay capital gains tax on the sale, which can be up to 20% depending on your tax bracket. However, the IRS allows homeowners (not investors!) to exclude the sale of up to $250,000 (or $500,000 if married filing jointly) of a primary residence if you lived in the home for at least two of the last five years.

Let’s look at another example where this might come in handy. Paul and Karin bought their home in 1990 for $150,000. Today, they can sell the property for $500,000, clearing $300,000 after the sales expenses. If they keep the home as a rental for, let’s say, five years and then sell, they’ll potentially owe $60,000 in taxes. But if they sell now, they can potentially keep that $300,000 in profit without paying any capital gains tax.

Of course, by keeping the property, there is always the likelihood that the property will appreciate higher than what the tax would have been, but there are no guarantees when it comes to real estate values.

(Be sure to consult with an tax professional regarding any tax information you read about or read the IRS’s rules on the topic for yourself.)

4. Does the Future Look Bright?

Another important factor to consider when deciding whether to rent or sell your house would be to put on your crystal ball and gaze into the future. What do the next five, ten, twenty years look like for your home’s location? Are things improving? Will your neighborhood decline in value? If the future looks dark, consider selling now to avoid problems later.

You don’t have a crystal ball but trying to gauge where the market’s going is not impossible. Look at the growth of your city — is it moving away from you or towards you? Are businesses moving into your area? Are homes being fixed up or left to rot? You can’t know with 100 percent certainty, but by analyzing the current trends in your market, you can make a more informed decision on whether to hold on or sell now.

5. Can You Handle Tenants?

Finally, are you willing to be a landlord? Because honestly, many people are simply not cut out for the life. While some tenants are a dream to manage, others require significant time and patience. 

Luckily, you can learn and improve on landlording skills.  All new landlords make mistakes, but if you are the kind of person who is willing to learn, you may fare well.

Also, just because you own rental properties does not mean you have to be the person dealing with the tenants. Professional property management companies, such as Greene Realty and Property Management exist in your city.  By calling Greene you can cut the stress of rental property ownership down to a minimum (for a fee, of course!).

So, Should You Rent or Sell Your House?

Deciding whether to rent out your house or sell it is a choice only you can make after weighing all the options.

If you are trying to make that decision right now, look at the five factors outlined above and make decisions that works best for you, your family, and your financial future.  Greene Realty and Property Management can offer guidance and insight into the real estate market in this area.  Our experience and expertise are available to assist you at any time.   Our solid reputation and strong values speak for themselves. Call Greene Realty and Property Management today.  Service you deserve, People you trust!

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Frequently Asked Questions

Landlord FAQ's
  • How do landlords view documents and reports?

    Landlords need a place to securely access all owner statements and other important documents. Including the signed Management Agreement, HOA documents if necessary. Greene Realty provides all clients in any location throughout West Volusia a secure online platform to login, view and manage all their statements and reports.

    Using your online portal is easy and efficient. Take ownership of your property anywhere in and around West Volusia.

    All West Volusia property tax records will be mailed to you yearly. In addition, you get photos and a report of your home inspections (if added).

  • How do we handle evictions?

    This is never the desired outcome but can be an unfortunate circumstance. Regardless of what city your property is in within West Volusia, FL, a concern of any homeowner is being stuck with a tenant who is breaking the terms of their lease. Greene Property Management always holds the tenant responsible for their legal obligation and will work for the homeowner to minimize any vulnerability.

    Should an eviction become necessary, we will do our best to reduce your risk as a landlord by following all state laws to ensure a rapid, minimal cost, decision. Staying abreast of local law changes and regulations is paramount to a successful eviction. If you want to know how to evict a current tenant at your property, even if it is not currently managed by Greene, we are happy to help. Please use the contact form here to submit your eviction inquiry.

  • How do I check my account balance?

    Log in to your Resident/Owner Portal and click the Payment tab. This will show your payment history and charges in your ledger.

  • Does Greene Property Management inspect my rental?

    GPM does inspect each property. We inspect based on the Management Plan selected, which ranges from 2-4 times per year. Tenants are given a minimum of 24 hours’ notice prior to any property inspection. We take out and inside pictures for documentation. Additional inspections can be requested for a small fee.

Tenant FAQ's
  • How can I become a tenant with Greene?

    1. Work with a Team Greene Property Manager to find your perfect place to live.

    2. Complete and application on our website.  All those 18 years and older living in the property must complete an application and screening.  A $75 Non-refundable fee per application must be included. These fees are non-refundable. Our application process can take 3-5 business days.

    3. You must have proof of income.  Your income must equal at least 3 times the monthly rent amount.  Examples of income verification include, but are not limited to: 3 consecutive paystubs, 3 months of payroll reports from employer, current proof of government income, proof of retirement, liquid assets (bank accounts, stocks), spousal support, legal verifiable income.

    4.  Credit must be  least a 600 credit score and no late payments in the last three months.  Provide 3 years of rental history with contact numbers. Criminal history will be assessed on an individual basis.  We base our decision on a concern for the safety of other residents and staff. Any conviction for the manufacturing and distribution of illegal drugs will result in application denial.

    5.  You must be willing to start the lease within 30 days of applying.  We will only process completed applications. Our application process generally takes three business days from the day you provide us a complete application and all required documents.  We make no guarantee as to the time it will take to process your application. This varies based on the responsiveness of your landlords and employers and other business demands.

    6.  Be honest and truthful in your application and answer all questions.  Falsification of facts or withholding information is cause for denial and or eviction later.

    7. We strongly encourage you to view the property prior to applying.

    8.  If approved, GPM will need a minimum of 2 days to prepare the property prior to move in.

    9.  Pets—Check to confirm pets are considered in the rental.  You must submit a pet application. No pet will be considered without a pet application.  Any guide dog or other assistance animal will be permitted upon verification. Be prepared to verify vaccination records and pets current weight.  If a pet is approved it is understood that the tenant will carry insurance to cover the animal.

    10.  Students/applicants who do not currently have income must provide a guarantor.  The guarantor must complete an application and provide all verifications necessary to qualify.  The guarantor must live in the USA and must assume financial responsibility of the lease, including property damage.  All roommates must have a guarantor or all qualify without guarantors.

    11. We must have a state issued photo ID for each applicant.  Such as a driver’s license, passport, military ID for each applicant and co-applicant.

    12.  First qualified applicant to sign and pay $500 to hold the property, will be the first to rent.  We will only hold properties with a $500 non-refundable deposit . This will be applied to your 1st months rent at the time of move in.

  • How do we handle evictions?

    This is never the desired outcome but can be an unfortunate circumstance. Regardless of what city your property is in within West Volusia, FL, a concern of any homeowner is being stuck with a tenant who is breaking the terms of their lease. Greene Property Management always holds the tenant responsible for their legal obligation and will work for the homeowner to minimize any vulnerability.

    Should an eviction become necessary, we will do our best to reduce your risk as a landlord by following all state laws to ensure a rapid, minimal cost, decision. Staying abreast of local law changes and regulations is paramount to a successful eviction. If you want to know how to evict a current tenant at your property, even if it is not currently managed by Greene, we are happy to help. Please use the contact form here to submit your eviction inquiry.

  • How do I check my account balance?

    Log in to your Resident/Owner Portal and click the Payment tab. This will show your payment history and charges in your ledger.

  • If something needs repair in my rental what should I do?

    Log into your Resident Portal and enter a Maintenance Request. By explaining in full detail the situation, we can address this repair as quickly as possible. Your Resident Portal is the most direct way to get information to GPM.

  • What happens when I move out?

    Be sure to let GPM know 30 days in advance, in writing. An email will be sent with move out procedures to follow to ensure you receive your entire security deposit back.

  • How do I get Renter’s Insurance?

    Log into your Resident Portal and sign up for Renter Insurance. The cost starts at $12 per month and is the most convenient way to receive coverage. You may seek outside insurance options but please call the office with proof of insurance. All Tenants renting with GPM MUST have insurance.

  • Does Greene Property Management inspect my rental?

    GPM does inspect each property. We inspect based on the Management Plan selected, which ranges from 2-4 times per year. Tenants are given a minimum of 24 hours’ notice prior to any property inspection. We take out and inside pictures for documentation. Additional inspections can be requested for a small fee.

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