When homeowners ask us "Should I sell my home or should I rent it out?," we ask them in response a series of questions to help them evaluate all of their options and arrive at the best solution for them.
Because no two situations and no two clients are the same, everyone answers these questions differently. That's why a personal and confidential conversation is best.
However, to help you think through your options, here are the questions we ask in response to your asking whether you should rent out your home rather than sell it.
1. What is going on in your life? What is your situation? Why do you need to move?
Usually the homeowner either wants to move (wants to upsize, downsize, change neighborhood, etc.) or has to move (relocation, deployment, change of relationship or job, etc.) and does not know which way to turn because the financials associated with moving are usually very tight.
The more information you as a homeowner can share, the better. As sensitive as some of these situations are, the more facts the better to help you find the right answer for your situation.
2. What is the address and subdivision of the home you are considering selling or renting out?
To help answer the question about selling your home or renting it out, we need to complete a market analysis of the home both as a sale and as a rental.
Is your home in need of repair or is it turn-key? These answers and the market analysis help us arrive at a realistic value.
It's best to be conservative on (rental or sale) numbers so you can plan your move accordingly. If you get more money than planned - great!
3. What do you owe on your home?
We need to know the payoffs for all mortgages, including home equity lines to calculate how much equity, if any, the homeowner has in the home.
We also need to know if the homeowner is behind on mortgage or HOA payments and, if so, how far behind.
4. What are the real estate trends in your community?
Are homes appreciating or depreciating in your community?
What are the employment and new construction forecasts in the area?
What do we see happening? As professionals involved in real estate and the Baltimore Maryland Metro Area, we monitor real estate trends. We're involved in our communities, attend HOA meetings and stay current on the news. We can share our thoughts on the future values in the community.
5. Are you able to sell your home?
If you owe more than market value, do you have cash to bring to the table?
Is it liquid or in a 401k?
Do you qualify for a short sale?
What are the pros and cons for you of both short sales and foreclosure options? Our partner, Yaffe Real Estate, is a Certified Distressed Property Expert and have helped many homeowners through the short sale process. We will weigh all options for you.
6. Are you ready to be a landlord?
If you are leaning towards renting out your home, do you have the temperament to be a Landlord?
Can you handle the landlord/tenant ups and downs?
We want to make sure that you have a realistic picture of what it is like to be a Landlord and that you understand the responsibilities. If you'd rather not have to deal with the day to day issues of property management, you'll want to hire a property management company.
We can review all of this with you in detail.
After this discussion, usually the answer to the question - "should I sell my home or rent it?" becomes obvious for you.
By offering both sales, rentals and property management all under one roof, we can have an honest, open dialogue so that we can find the right solution for you and your family.
