Many homeowners are faced with the decision of whether to rent or sell their newly remodelled fixer-upper. The following article will provide guidance on how to decide which option is best for you, what responsibilities come along with being a landlord, and the costs involved in both renting and selling your property. Learn more about making the best decision for you from Realtor Hana Hyams.
How to Decide Which Choice is the Most Attractive for You
Owning a rental property can be very lucrative, but also comes with a lot of responsibility. In order to succeed as a landlord, you must have the knowledge and experience necessary to deal with your tenants' concerns effectively without being too lenient or too strict. Renters want someone they can rely on in issues that arise within their property.
Selling your rehabbed property can also be a very profitable option. If you have decided to sell, it is important to understand what homes in your area are selling for and how much profit you will make. The more work that has gone into the home, the higher its value could be, so make sure to consult with Hana to determine your property’s value.
You must also thoroughly inspect your property prior to listing it so that you can provide buyers with detailed information regarding any completed updates.
Land lording Is a Hands-on Job
If you choose to rent out your property you must be prepared to act quickly when issues arise. Property managers will help you with this, but this is obviously another cost you'll need to consider in your cash flow analysis.
As a landlord, it is important that you understand the terms of your contracts and what rights the tenants have. It is up to you to make sure that they are not being taken advantage of. You will need to be available at all hours for any emergencies that may arise, which could mean missing sleep or spending the night on your property if needed. This includes having a relationship with a local locksmith, plumber, electrician, and more in case an emergency arises outside of normal. Make sure to check out reviews of several contractors, as well as their rates and any licenses, bonds, and insurance they may have. This way, you’re guaranteed good workmanship at reasonable rates at all times.
More About Costs and Revenue Opportunities
Once your property is rehabbed, the costs of selling are mostly complete, but they are still additional costs to consider. Unfortunately, they are two very big ones - taxes and realtor commission. If you've owned the property for less than one year, you may be on the hook for a high tax burden (consult a pro here). As the seller, you'll typically also be responsible for paying both the listing agent and buyer’s agent's commission, usually totalling 6% of the sale price.
The costs of being a landlord are many and ongoing. You'll be responsible for many things including repairs and maintenance, utilities, property taxes, professional fees for accountants and attorneys, and much more. If you're able to find a quality property management company, they can handle the majority of this. Either way, make sure you factor all of these costs into your profit and loss estimations.
Summing Up - Rent or Sell?
The decision of whether to rent or sell your newly remodelled fixer-upper is a tough one. This article provides guidance on how to decide which option is best for you, what responsibilities come along with being a landlord, and the costs involved in both renting and selling your property. It also offers information about making the most profitable choice among other things like taxes and realtor commission if you are deciding to sell. This will help make it easier for homeowners who are faced with this difficult decision.