When the time comes where you have to move to a different house for whatever reason, whether it’s for a job, to be closer to family, or maybe you’re taking care of a loved one’s Colorado Springs real estate who is no longer with us, choosing which route you’re going to take in the process can be a challenging task.
There’s two ways that you can go; you can either decide to sell the house, or try and turn it into extra income by renting it out. Neither decision can be made without a plan, so it’s important for you to know some tips to help you decide which scenario is best for you.
Selling is probably the more common decision when people are faced with this fork in the road, and it’s probably because they just want to get the house out of their hands and try to make as much money back as they can from when they bought it. Renting has become more popular in Colorado Springs real estate over the most recent years since people have realized that it can be a valuable source of income that they wouldn’t have been able to get otherwise.
When you’re faced with this decision, consider the following tips to help make the choice easier for yourself:
Research the market
With the ups and downs, mostly downs, the real estate market has seen since the crash in 2008, it’s always important to keep up on the trends and the news regarding the current and possible future status of Colorado Springs real estate. Avoid looking at the housing market as a whole, but rather research your specific area, see if the prices have been consistently going up, staying the same, going down, or bouncing back and forth. If the prices seem to be going up and you wouldn’t be losing much or any money selling it, then it may be a good idea to do so. If the prices are fluctuating, renting would probably be your best option in order to wait for the market to stabilize and make money off of it at the same time.
How’s the neighborhood?
One of the most important things to consider is the neighborhood the house is in. If you’ve lived there for a while, around a decade or so, there have probably been some changes to the area, some good and some bad. If you’re moving because it seems to be on a decline, then it would most likely be in your best interest to sell as your house’s value will decline with the neighborhood. You can watch the property values to see the impact, look at houses in the area that are up for sale, see what they’re listing at and what number they sell at. Remember that the numbers don’t lie!
The cost of keeping it vs the potential profit
Based on factors such as property taxes and the mortgage it may be expensive to keep the home, but you may be able to make up those costs by renting it out for a price that covers that and more. Depending on the condition and location, you can make a great profit by renting it out, and it could make for a great source of monthly income to go into your savings. Another thing to consider is that if you decide to get tenants, you’re still responsible for the cost of repairs, so if the house is older and has had some things go wrong, you may want to fix it up before you let anyone live in it. If that cost may seem like too much, then you should sell.
Can you handle it?
Renting out a piece of Colorado Springs real estate takes much more than looking at it as a financial decision. It becomes a commitment that you need to take care of every single month. You’ll need to stay on top of collecting rent money, look at the bills, making sure the renters aren’t causing any damage, and being there at any time to answer their calls for repairs and emergencies.
One way you can avoid all of these responsibilities is by hiring a management company to oversee everything that goes along with the house and tenants. Also, make sure that you always have money saved up to cover the rent in case you have to evict the tenants, or they decide to break the lease. If this seems like this much of a commitment is too much for your lifestyle, then selling would be best.
Updating the home
One perk about renting your home out is that you won’t have to make so many updates to your home as you probably would if you wanted to sell it. When you rent your home you should only make necessary adjustments in order to make as much profit as possible. You may be thinking that the more you update it, the more you can ask for rent, and you may be right but it all depends on the area. You don’t want to ask for so much money in rent that it would make it unreasonable for potential renters because they may just want to put all that money to buying their own home.
Think about this strategically; make sure your home is attractive to renters, but update it in a way that makes it comfortable, and do it all at a low cost.
Remember that although you want to make this decision as soon as possible, it’s best to make sure you’ve thought about each scenario thoroughly. Take some time to research Colorado Springs real estate trends, the best thing to do would be to speak to a real estate professional who can help give you estimates for the value of your home and which route may be best to take. Contact Merit Co today for assistance in making your decision.