Moving from one primary residence to another comes with a list of big decisions to make. One of the biggest that can get overlooked is the choice to sell your former home, or keep it to rent it out.
Sometimes, owning a rental property can be an excellent stream of income, especially if you have a low mortgage balance. However, the effort needed to become a landlord may take you by surprise. And flip flopping on the decision can lose you profitability.
In order to figure out if renting or selling your home is the right call for you, it’s important to step back and consider how real estate endeavors fit into your future investments. The following are some tips and tricks from Sterling Property Solutions to help you come to the correct conclusion for you.
Should You Rent or Sell Your Westchester Home?
What’s the Value of Your Home To You?
Your home is likely to be your largest asset, but you may to hesitate to call it an investment. If you plan on using your home as your primary residence, the idea of gains made off of renting or selling may not even occur to you. Other people may not want to consider relocating based on financial value alone. Money talks, but the value of your home can be difficult to measure in any conventional currency.
When compared to renting, it’s still common to see buying a house as an investment. Calculating the real return on that investment is harder than it seems, and doing overly simple math to figure it out may lead you to having an exaggerated view of your home’s true value. You have to make the numbers work and dedicate yourself to your models if you want to invest in your home like a pro.
Many factors that impact your potential return, such as interest rates, are outside of your control. This makes it all the more key to consider your choice in the context of your long term financial goals.
Impact of the Tax Cuts and Jobs Act on Landlords
Recent tax legislation has been both a boon for landlords and a blow for homeowners in Westchester County. The cap on state and local tax deductions, as well as changes to the tax deductions on home loans, negatively impacted homeowners.
Most landlords won’t be victim to the same limits on tax deductability and mortgage interest. In addition to other benefits brought on by the law, the new tax bill may be able to award landlords with a tax deduction of up to 20%. The importance of how this legislation may affect you is something you should discuss with your accountant and with professional property managers.
A few factors working in concert may be enough for renting to become a financial benefit to you.
First of all, the cash flow needs to work in your favor, and you want your expected rental income to cover your regular expenses as well as unforeseen issues. The margins for your after-tax profit should also be solid if you’re going to put in the investment to become a landlord.
If, financially speaking, you don’t need to sell your home, renting may be an excellent option for you.
A lot of work is necessary to become a landlord, but Sterling Property Solutions can take the heavy lifting off your hands. Our in depth knowledge of the Westchester market will get you the optimal rent price and highest possible returns.
We know how to handle legal and government compliance issues. We also take care of tenant and maintenance issues, with 24/7 maintenance service. And our Online Owner’s Portal makes keeping tabs on your property a breeze no matter the time or place.
If you’re interested in a rental analysis, sign up for free with Sterling. We can help you understand whether renting out your home is the right choice for you.
Why You May Be More Interested In Selling
If you’re not planning on putting all your proceeds towards your next primary residence, funding your other goals can be enough of a reason to sell as well.
While certain aspects of current tax law can be beneficial to homeowners, the malleability of those laws mean that you shouldn’t form your plan on tax law alone.
Sterling is no one trick pony, and we can help sell your home just as well as we can rent it out. Sterling CEO Linda Einfrank leads a team who are each property managers and real estate professionals. She has years of experience as both a real estate broker and a property investor. Experience goes a long way, and we can help you with things you didn’t even know that you didn’t know.
The choice of whether renting or selling is the best bet is ultimately up to you. Regardless of your path, Sterling has got your back on how to get there.
STERLING PROPERTY SOLUTIONS
77 Tarrytown Rd Suite 1E
White Plains, NY 10607