Should you sell or rent your Tampa home?
Whether it’s financial reasoning’s or potential job prospects, many people in today’s economy are forced to relocate for better opportunities.
Selling may seem like the obvious choice, but with Tampa’s real estate still close to the bottom of the market, renting out your property may be the better choice for you. Renting allows owners to hold onto their property while waiting for its value to appreciate.
According to Smart Money, whatever your reason is for moving, it’s important to have a healthy grasp of the financial issues at play when weighing this decision. Here’s what you need to consider when in the position to either sell or rent your Tampa home.
Can you afford to sell?
Property owners with significant equity are able to sell their home and use the capital as a down payment on their next home. Additionally, if the owner meets certain requirements, they may be eligible to exclude up to $250,000, or $500,000 if married, of capital gains from federal income taxation.
Are you planning to return?
If you intend to move back to the Tampa Bay area in the future, you may want to hold the property. In this case, you can rent out the property and allow its value to appreciate.
Can you afford a rental?
There is an inherent cost to becoming a landlord and not everyone can handle the financial responsibility. Owning two homes is not only a burden, but requires additional money for regular upkeep and maintenance. For instance, do you have money aside to make the mortgage payments if you have a vacancy or a tenant refuses to pay rent? Do you have the finances to cover the cost of maintenance and repair bills at two properties? If you don’t have the cash to account for these inherent costs maybe renting your property is not a viable alternative for you.
Renting can be a good investment:
If you can afford to be a landlord, now is a very good time to own rental property. Home prices have bottomed and prices are slowly appreciating in the Tampa Bay area, and holding a property as a rental allows you to take advantage of this capital appreciation. Renting a home comes with tax breaks as well. Landlords are able to deduct just about any out-of-pocket expenses including property taxes, property management fees, costs of repairs to the property, maintenance expenses, advertising, and mortgage interest payments.
As Smart Money says, becoming a landlord isn’t for the faint of heart. Becoming a landlord means opening yourself up to late night maintenance calls, strangers in your home and potential legal issues. Also, it’s important to be aware that your property may incur damages during tenancy.
These are legitimate concerns for all property owners, but they can be mitigated by hiring a professional property manager. Property managers generally charge up to 10 percent of the monthly rent; however, they manage all aspects of the rental. For example, property managers can find you qualified tenants, maintain the property, collect rent, handle evictions, and conduct annual evaluations to make sure your home is in sound condition.
In the end, there is a lot to contemplate when deciding to rent or sell your Tampa home. Make sure whichever you choose is the best option for you financially and practically. Contact us or give us a call if we can answer any questions at (813) 875-7474.