Should You Rent or Sell Your Home?
In this declining market in Casper, WY and the surrounding areas, you might be trying to figure out if you should rent or sell your home. This is always a hard family decision. I am here to help you and follow your lead.
How long until you break even or want to buy your next home? You should evaluate the current market conditions. The best way to do that is to get a CMA, a market value of your home in Casper, WY. This will have market trends for your area and both a value of your home and the costs associated with selling it. You can ask for a rent assessment as well to know what your home would rent for in the current market and a yearly breakdown of normal costs incurred. With figures in front of you, you have a good place to talk over the pros and cons for your family of selling or renting.
These cannot be stressed enough. Renting is by far a temperament game. Hiring a property manager can cut down on the inconvenient calls and hassle factor, but in the end: it is your home, your financial asset and the uncertainty of it all will weigh on you. It just isn’t for everyone. Approximately 1 to 2 percent of tenants do not pay the last month’s rent or fail to pay at some time during the term of the lease: be ready for bumps outside of our control. Ask yourself whether the personal costs to you and your family are worth the trouble. Talk over the key questions: How much time do you have to spend on a rental property? Is the financial return going to be worth it?
Consider the long-term outlook for your neighborhood.
Historically, does this area bounce back fast? Hold value? Is this an improving district or is it declining for the foreseeable future? If values are declining, and you will still make a profit, you might prefer to sell and take the profit before the market declines further.
Analyze your Cash Flow
A key question to ask yourself is really what will you do if you don’t think you can break even or make a profit. Talk over questions carefully like, “Can I carry that extra debt? Is it worth it to me? Will it limit my other goals for housing, vehicles or emergencies?” Sometimes it is worth taking a shortfall on rental prices now because you will be able to sell the property down the line at a higher price. Or, cut your losses before its worse and sell.
Will damage or tenant turnover be a struggle for you? Personally or Financially? I see a lot of people who keep well-maintained, clean homes just hating tenants who punch holes in the walls or leave stains on the carpet. This is part of tenant turnover. Will it irk you? Do you have the finances to fix the unexpected? I typically recommend a $5000 reserve for five years-one major fix or improvement just as if you lived in the home.
Costs, Costs and Costs
Talk over prep with a good property manager to get it in a rentable and safe condition for tenants. Budget a safety net for repairs or even the tax consequences. Be sure you are looking at the overall expenses of renting vs. selling. Property management is expensive so make sure you know your break-even point and have a plan for the expense of continued property maintenance. A great place to start is that market valuation and rental assessment.
This is the real expense to renting in Casper, WY. Often lenders want a year lease, signed and documented cash flow for the year and a continuing lease, before they take the income into your debt ratio. This is true even if you are profitable! This can severely limit your purchasing power for the year. Vacancy rates are on the rise so at least one month a year without any rent paid should be factored in. If you can float two households either through renting yourself or bridging to a second home, the added cost of each should factor in for your family’s financial future, too.
High-End Rental, an Extra Note
If your home is pristine or a high-end home, these high-end rentals are the hardest in the rental market today due to the limited number of tenants willing to pay $1700 or more. In addition, the damage the wrong tenants can do can far outweigh the rent they have paid. Be selective.
Thank you for reading my renting vs. selling tips.
If you have any questions, please do not hesitate to reach out and call us at 307-234-6659 or my cell is 307-247-0963!