Many homeowners eventually find themselves faced with the same question: Should I rent, or should I sell? There’s an appeal to both options. If you rent, you get a passive revenue stream. If you sell, you get money in a lump sum. There are a lot of things you need to consider when renting or selling. Here are some of the most important factors.
Are You Prepared to Be a Landlord?
And that doesn’t mean financially. That means emotionally and psychologically. Being a landlord is hard work. You might get calls in the middle of the night because a basement is flooding, and you’ve got to respond. It’s a legal requirement to keep the property habitable. You might have to go through the process of eviction despite really liking your tenants. And you might need to deal with extensive damage to your property on your own. If you aren’t emotionally ready, it can be a nightmare.
Is Your Home Ready for Tenants?
In most places, and Oklahoma is no exception, there are specific requirements that properties need to meet for habitability. Therefore, it’s not just you who needs to be ready for a landlord. Your property also needs to be ready for renting. If your property doesn’t have everything it needs to be habitable (such as heating and cooling), you won’t be able to rent it out. But you could potentially sell it in that condition to the right cash buyer.
Will Your Home Appreciate Greatly in Value?
Most people rent out their house because they know they can sell it for much more later. If you’re in a very hot market, it makes sense to hold onto that property through rental so you can sell it in the future. But what if you’re not in a hot market? Or what if your real estate is in a bubble? If you don’t feel that the property is going to appreciate in value, you might want to just cash out and avoid having to take on the issues that come with a rental property.
Do You Have Enough Liquid for Emergencies?
Liquid cash is important. Let’s say you rent out your home today and the HVAC breaks tomorrow. You’re going to have to shell out anywhere from $10,000 to $20,000 for a new HVAC system, and if you don’t purchase that system, you’re going to be out of rent. If you’re still paying a mortgage and your tenants stop paying the rent, you’ll have to pay the mortgage on your own until they start paying. So, as a landlord, you need a lot of liquid money.
Are You Going to Get More Properties?
Most landlords break even if they have one or two properties. If you’re thinking of buying up rental properties steadily, then you have more protection. But with a single rental property, you’re going to be out money if you have a single bad year. Having a lot of properties gives you the opportunity to diversify, and rather than having to manage everything on your own, you can hire a property management company instead.
Renting often seems like a great opportunity. But it’s also a lot of work. If you’re prepared to put a lot of your energy, time, and money into renting properties, then it’s possible that renting a home would be a great idea. But if you aren’t prepared to make those sacrifices, you can sell instead. You can then put the money that you get from selling your property into a different (and less intense) form of investment.
Are you ready to sell your home? Are you still wondering if you should rent or sell? Consider getting a quote. At We Buy Houses Tulsa, we can tell you exactly how much we’d be willing to pay for your home so you can make an educated decision.