So you’ve got a lucrative piece of property on your hands, and you’re wondering what you should do with it. On one hand, you could sell for a big payout that you can use on whatever you want, including a new home elsewhere. On the other hand, you could rent it out and potentially make more money in the long run.
Making a hasty decision on this issue can result in a lot of headaches. Read on to find out which of the two options is right for you.
Selling
The selling process is pretty in depth and takes a lot of things into account, (which is why you should have a realtor!). But once it’s over, it’s over. You don’t have to worry about fussing with tenants or doing any extra work on your investment.
Selling is best for people who are either too busy, too far, or unwilling to find tenants and all the responsibility that comes with it.
Do be aware that depending on where you live, mortgage properties can be on the market for a long time. Having intimate knowledge of the local real estate scene can obviously lessen that time, but sometimes there’s just nothing you can do about it except have frequent open houses and wait patiently.
Renting
Renting is an option that is often ignored by most people. A lot of sellers think that it’s a very complicated and annoying process. But if you price your rental property properly and invest the time into finding good tenants, it can be pretty easy and very lucrative.
However, renting does get complicated if you still owe a mortgage, own a condo, or are in the process of foreclosure.
If you own a condo, you’ll need the approval of your condo association. They can be pretty strict when it comes to renters and you’re going to be held responsible for any trouble that your tenants cause.
If you still owe a mortgage, your mortgage documents may have a section that explains whether you can have tenants or not. Some types of loans, like VA loans, require owner occupancy.
If you’re in the foreclosure process, things get much hairier. In some cases you can rent a property that is being foreclosed on, but your tenants have a right to know that this is happening. It might be difficult to find a renter that’s willing to put up with that.
Most homeowners opt to just sell their homes outright. It’s a clean break, and once the home is sold you don’t have to worry about anything else. But renting might be a smart decision too.