Do I rent out my house and get a stable income or sell it at a higher price to get a big one-time profit? This is one question that every real estate investor has in his mind. This is not a straightforward decision and some important factors have to be taken into consideration.
Before making a move, consider the following parameters
1. Increase or decrease in the property value
A lot depends on the current property value and its comparison with the actual cost. If the price of your apartment, villa, or condo is lower than what you paid, selling would surely incur losses. In such cases, renting out is the finest alternative since you get a stable income without losing out on money.
If you see great jumps in the property price and a consistent income is not your priority, selling is the best alternative for you.
2. Consistent income vs a onetime jump
Investors have different priorities and preferences when it comes to putting their money in real estate.
- For some people, the return on investments is a way to meet monthly expenses. They buy a property and rent it out. In this way, they get a fixed sum on monthly basis. If you have a similar priority, then going for rent out should be your preference.
- Similarly, certain people go for real estate investments to get a one-time profit. They procure property, spend money on renovation and then sell it at an increased price. Thus, before choosing one of the options, set your priorities straight.
3. Do you have the patience to deal with tenants?
It is not an easy job to deal with tenants. Each one has a different temperament and immense patience is needed to deal with them. Some of them can make your life hell over the smallest of problems. In addition to that, following up for timely rental payments is another responsibility that landlords must fulfill.
If you are not patient enough to deal with delayed rents, running to get maintenance work done, and satisfy tenant needs then property selling will work better.
4. Being located near to your property
A lot depends on whether you reside near to your property or not. Some people invest in distant areas and such cases, rentals become quite exhaustive. You must spend money on transportation and do a lot of running around. This means unnecessary time consumption. In such cases, selling the property for a better price is much easier.
Renting out an owned property and opting for selling are both alternatives that property owners have. However, every individual should consider his suitability and then select. For instance, people who are not interested in generating high-profit margins and prefer stability will find tenants. A landlord must do a lot more than signing the rental agreement.
Similarly, sellers are responsible for making all possible improvements to get good profit margins. This requires investing both finances and time.