Here at The Sam Team, we're often approached by homeowners wondering whether they should sell their current home or consider renting it out. Many owners think one option is naturally more profitable than the other; however, there's no one-size-fits-all solution. Selling real estate is a personal journey and it varies for everyone. There is no right or wrong answer to many questions about properties — they need to be addressed case-by-case. That being said, once you have an overall understanding of the pros and cons of selling or renting out your house, you can decide what is best for you. There are benefits to both routes, but it's simply a matter of discovering which option suits your unique situation.
Let's Look at Numbers
This may not be the most exciting thing to examine first however it's important to understand whether or not the property will even produce some monetary benefit! Let's make sure that when the property is rented (and the expenses associated are deducted — for example, mortgage, utilities, tax, insurance) it will give you a monthly profit. If it doesn't, and it's looking like this will result in a loss, perhaps we should then consider selling.
Examine the ROI — Return on Investment
The next thing we can examine is the return on investment. Let's say that after looking at the above math and numbers, we will make a profit by selling. You should consider how much you will profit if the house was sold at the present, and calculate losses incurred from agent fees and other sales expenses. If there isn't a lot (or anything) that you will profit, perhaps it's best to keep the house and wait for the market to improve — and in the meantime, consider renting.
Look into the Crystal Ball
Though we aren't fortune tellers, we can still evaluate the future of our home, neighborhood and general market. Let's take a look at the next 2, 5, or even 10-15 years ahead in Pearland. If things continue to grow in Pearland even more in terms of home value, then perhaps now (and the near future) is a great time to sell. We recommend looking at the growth of the city: if businesses are moving into Houston as they continue to do and if homes are being fixed up and people are expanding the area, this is great news for home sellers. We can always analyze current trends and make an informed decision to sell now or sell later and rent in the meantime.
Think About How You Will Fare as a Landlord
Or perhaps the better way of asking this is: can I handle tenants? Renting out a home is not always as transactional a relationship as it sounds. People are all different, and the same goes for tenants — some are easy as pie to manage and others may require more patience. If you're new to landlording, don't be afraid either — it's a skill and you'll always get better with time if you're willing to learn. You can also reach out to professional property managers to help, and if you think you're the right person (or people) for the job, renting could be your answer!
So, what's the conclusion? Luckily, with real estate, you can have your cake and eat it too. If it's in the budget, you can even rent an old property and buy a new one. While only you can decide what the better option is for you, or you and your family, the above should provide some guidelines on the elements you should consider. Spend some time weighing the above options and remember, we are here if you have any questions.
Connect with The Sam Team for all of your home selling questions. We know the Pearland real estate market inside and out, so we'll help you make the right decisions when it comes to making the most of your property sale. Reach us today at 832-200-5656!