If you’re agonizing over the decision about whether to rent or sell your Long Beach property, we understand, and you’re not alone. We talk to homeowners all the time who are moving out of state for work or personal reasons, following new military orders, or moving from the home they currently live in to another property they’ve just purchased.
Selling might be best for you if you need cash right away and you know you have no interest in holding onto the asset. But, if you don’t need instant access to cash and you’d rather earn some impressive returns in the long term, renting might be your best idea.
Ultimately, it will depend on your goals and financial situation.
Selling Your Home: Equity and Market Strength
When the sales market is strong and home prices are in your favor, selling can be an excellent way to earn some cash and relieve yourself of the responsibilities that come with owning a rental property. Maybe you need the money you’ll make on a sale to send a kid to college or put a down payment on a new home. There might be other investment opportunities you’d like to explore. Whatever your reasons for needing a predictable sum of money, selling your asset can deliver that. If you have enough equity in the property and you know you can get the price you want, selling is an easy way to get rid of the investment and move on.
Renting Your Home: Cash Flow and Appreciation
There are many financial benefits to renting out your property. You’ll be able to earn a reliable rental income every month and your asset will continue to appreciate in value, delivering a larger payoff when you finally sell in a year or five years or 10 years. The rental market is strong in Long Beach; there’s a well-qualified and reliable pool of tenants, and rental prices are high. Plenty of good renters are looking for well-maintained homes, and they don’t mind paying top dollar for great living spaces. Your tenant will effectively help you pay off your mortgage while your property’s value continues to rise.
Consider Tax Benefits
There may be a capital gains tax on the sale of your home, whereas with rental property, you’re able to take a lot of deductions. You can deduct the home’s depreciation, which is pretty generous by IRS standards, and you can also deduct any expenses associated with the home, such as maintenance and professional services like accounting, legal fees, or property management. These write-offs help to reduce your overall tax liability.
Becoming a Landlord and Working with Property Managers
If you don’t think you can detach emotionally from your property, selling it might be your best option. You need to stop thinking about it as your home and start thinking about it as a business. You could work with property managers if you’re not sure you have the experience, the time, or the personality to work with tenants and respond to maintenance and other issues. Professional property managers will handle all of the day-to-day business of your rental property, take care of tenant concerns, and make sure the value of your investment is protected.
If you’re thinking about renting your property instead of selling it, contact us at CMC Realty. We’d be happy to help you, and we’re also here to assist you in your decision if you’re still not sure what you want to do with your home.