Rent or sell home
Remember the time when you had a relationship with a high school girlfriend. You spend so much beautiful time with her; then suddenly, a new girl came into your life, which contains all those interest and etiquettes that makes you attract more with to that girl. At times, you would also think about dating her. Meanwhile, the problem is that you also have an old girlfriend in your life.
Although such stories look un-natural or don’t happen in your life, some things in your life do happen similarly to the girlfriend type. Yeah, we are talking about the house or apartment.
You had purchased a house or apartment in the past, but then you suddenly find another property that Is also fulfilling all of your desires, and you want to move on to that place. The reason could be anything related to your work relocation or something else; however, the same problem exists in your life, just like the old high girl school story, what would you do with the old house?
It would be difficult for anyone to handle two relationships simultaneously in their life due to various consequences. However, the same thing doesn’t happen in your life when you own two houses or apartments. Things could get more comfortable in your way if you decide the right decision for the old home.
You have the option of rent it out or sell it. But, it would not be easy to know what the best decision for you is. There’s no specific answer for both situations, as your preferences and real estate guidelines may vary depending upon your state. Therefore, you need to make the best choice by considering some essential factors that fulfill such a scenario.
Due to these reasons, we have come up with a list of the five most important factors for you in this article. Reading all of the factors will help you decide whether to rent out or sell your house or apartment.
List of Factors that helps you to decide to sell or renting out your house or apartment:
Factor No 1:
Math is one of the most important things that could help you decide whether the house or apartment would be right to sell or rent out. It would be a significant thing that you hate the math subject in your old school life. However, real estate investment math is not all about old school math.
It’s much easier for anyone to perform. A 4th-grade student would also understand the things and better understand the real estate investment math. However, at the time of doing the math, you need to ask yourself a question that whether the positive cash flow is producible from the property or not?
In general, we are trying to tell you here whether the rent out of property generates a profit or loss after excluding all the expenses associated with it. The expenses include repairs, Vacancy, HOAs, Management, Utilities, Insurance, Taxes, and many more. If it’s providing profit, then going with the rent out option is the best for you. Otherwise, it would be best if you sold it out as soon as possible.
If you are unaware of real estate investment math’s, you can consider various online tools that analyze the properties from different angles.
Factor No 2:
The second factor is the Capital Gain tax that you need to pay whenever you own a property and generate profit. The capital gain tax is up to 20%, which co-relates with your profit's selling price on the whole.
Let take an example of a fictional person Kim and Kyne, who own the house back in 2000 for around $100,000. In the current time, they would quickly sell the property for at least $300,000. Both of them have kept the property on rent for around five years, and now they are planning to sell it; the taxes would be around $60,000. However, if they do not keep it renal and sell it now, there is no need to pay the capital gain taxes.
Therefore, you need to pay attention to the taxes whenever you plan to sell or rent out your house or apartment.
Factor No 3:
The third important factor we need to understand here is the return profit you would get whenever you sell or rent out the property. Let's say you are planning to hold it today, the rates might not be that profitable, and you also need to pay the real estate agent fees, sales expenses, and other inclusive taxes.
If you are not making considerable sales after paying all these amounts, then it would never be a good option to sell it. Therefore, you need to take the property on hold for the future. For the time when the property value tends to get improve.
Factor No 4:
The fourth factor is based on analyzing the next few years about the home market. Whether things will improve or not in the future? Does it provide you a better value in the future? Does it make your future bright? If you are getting the proper answers, you need to hold on and rent out your house or apartment for future opportunities. Otherwise, make sure to sell it out if the outcomes are not amazing in your way.
Factor No 5:
The last but most important factor is whether you can handle all of the situations or not. Suppose you are considering renting out your house or apartment. Are you potentially strong enough to handle all the consequences of managing the tenants and providing them the perfect ambiance in your home? If you are capable of doing this, then renting out would be the best option for you.
On the other hand, are you in need of cash to sell your additional property when it can provide you better passive income in the current time and better profit margin in the future? If you are not needy, it would never be a good option to quickly and sell out your house or apartment.