If you’re paying attention to the Boston real estate market at all, you have likely heard stories of bidding wars, homes selling the very day that they’re listed, cash offers, and waived home inspections.
It’s feeling a little wild out there.
Sales volume is high even as inventory remains low and buyers are going to great lengths to secure the homes that they want – or simply the homes that they can find.
All of these factors would tell you that it’s an outstanding time to sell your Boston property. You can probably make more money now than you expected.
That’s a valid choice, but it’s not the only choice. If you’re looking for a long-term investment opportunity, holding onto that asset and renting it out can perhaps be the better decision, especially with a market that’s feeling a bit unhinged.
Even in a market as inviting for sellers as this one, there are many good reasons to rent your home out instead of selling it. Maybe you’re downsizing into a smaller home or relocating out of town. You’ll have to decide whether you want to sell like everyone else or hold onto that piece of property for the future.
At Platinum Realty Group, we are often called upon to help owners decide what to do with their property and whether it makes sense to sell it or keep it and rent it out. The ultimate decision, of course, will depend on your own goals and your financial status. The decision to sell or rent depends on where you are right now and what you want to do in the future.
Sell When You Want Cash and Don’t Need the Asset
Sell now, and there’s a good chance you’ll get more than your asking price.
If you place your property on the sales market today and it’s a well-maintained home in a good location, you’re going to sell it quickly. You’re going to sell it for some good money. This is a great opportunity for you if you need to get your hands on some money. Maybe you’re sending a kid to college or beginning your retirement. Perhaps you’re ready to start your own business or you want to take that trip around the world.
Selling can be an excellent way to earn money and walk away from the responsibilities that come with owning a property. Whatever your reasons for needing a predictable sum of money, selling your property can deliver that. If you have enough equity in the home and you know the sales market will deliver the price you want, selling is an easy way to move on.
Sell When You Don’t Want to be a Landlord
Renting your property out to tenants means – well, it means tenants.
Tenants living in your home, making messes in your home, and potentially damaging your home. We understand that can feel iffy to a lot of owners. Your tenants may not have the same standards of cleanliness as you do. They may have pets that scratch floors and dig up yards. Perhaps they’ll be less gentle with your property and its appliances and systems, creating faster wear and tear and deterioration. You might have to deal with property damage after the tenants move out, and there will be out of pocket expenses during every turnover period.
Tenants can easily be managed when you work with a Boston property management company, but we know that some people are never going to be comfortable with others living in their property. If you don’t think you can detach emotionally from the home, it’s better to sell it. Renting might cause stress and drama that you don’t need.
Sell When Your Boston Home is Aging
Tenants have pretty specific needs and desires. The trend now is for stainless appliances and granite counters – even in rental homes. To effectively rent out your home, the property will have to meet the demands of the market and the tenants driving that market. There’s no sense in renting out a property that will require thousands of dollars in upgrades and renovations just to prepare it for tenant showings and online advertising. You also won’t earn a lot of money on your rental if you’re spending thousands of dollars every year in maintenance and repairs.
Older homes typically require more maintenance and frequent repairs. That’s something that may encourage you to sell rather than rent your property.
The easiest properties to rent out are those that are newer or have been well-maintained and updated. If your property still has its original roof, furnace, water heater, and appliances, you’ll likely have to replace those items while you’re renting it out. There may be a lot of cosmetic work that needs to go into making the home attractive to tenants as well. If you aren’t interested in making these investments to keep your property habitable and appealing, selling it is better.
Rent Out Your Home to Earn High and Rising Rents
Lack of inventory is a problem on the rental market as well as the sales market. This sets you up nicely if you have a desirable home that good tenants will find attractive. There’s an increasingly competitive rental market in Boston, which has driven rental values up. If you decide to rent out your home, you’ll find you have a stable pool of well-qualified tenants who are willing to pay top dollar for a great rental home.
The local Boston economy is strong, with a diverse collection of schools, government employers, and businesses that keep the population employed and financially stable.
It’s a good time to sell but it’s also a good time to rent out your home. You can expect high rents now and into the future.
Keeping Your Property if You Want to Live There Again
If you’re relocating out of the Boston area and you’re thinking there’s a chance you may come back, keeping the property and renting it out is a great option.
There’s no way to know where prices will be in a year or 10 years. Trying to buy a new home in Boston at that point in the future may be nearly impossible for any number of financial and logistical reasons. By keeping your asset, you know you’ll have a place to live if you need it. Real property is tangible. It provides housing.
Rent Your Property if You Want to be a Real Estate Investor
Investing in real estate is something a lot of people want to do, but it takes capital to get started.
If you’ve considered real estate as a way to increase the power of your entire investment portfolio, this is a great way to leverage what you already own. When you own a piece of property already, it’s an easy way in. Keeping your property as a rental will allow you to stay present in a growing real estate market. You’ll have a valuable asset that’s appreciating over time while your tenants pay down your mortgage and contribute to expenses like property taxes and insurance.
Rent Out Your Home for Tax Benefits
Selling in this market will deliver a huge profit which is great until you’re faced with the tax bill.
There’s almost certainly going to be a capital gains tax when you sell your home. Renting out the property can help you avoid that tax exposure. Owning a rental home also provides a lot of tax benefits:
- You can deduct the home’s depreciation, which is pretty generous by IRS standards.
- You can deduct any expenses associated with the home, such as maintenance and professional services like accounting, legal fees, or property management.
- You can deduct the interest on your mortgage.
- You can write off any travel expenses when you need to visit the property.
These write-offs help to reduce your overall tax liability, and are a great reason to keep your property instead of selling it.
Working with Boston Property Managers
Boston property managers can help you effectively lease, manage, and maintain your rental property.
There’s no need to worry about marketing and showing your home, finding a tenant, collecting rent, making sure the home is well-maintained, or dealing with legal complexities and liability. Property managers do this every day for owners just like you. When you decide to rent out your property, contact a Boston property manager right away. You’ll need to know how much rent you can expect to earn and what you may need to do to prepare the property for the rental market.
These are some of the very good reasons to sell and some of the equally good reasons to rent out your property. The decision needs to be yours alone, but we can help you by running some numbers and talking through some potential challenges and benefits to each scenario. Smart investors understand the importance of surrounding themselves with experts. When it comes to Boston real estate and rental investments, we’re those experts. Contact us at Platinum Realty Group.