WHY SELL LOW? RENTING MAY BE AN OPTION
Concerned that they will not see a return on their investment, many homeowners are rethinking the sale of their home in the current real estate market. Instead, they are taking in to consideration renting their home until the market improves, giving them a steady income in the interim.
Whether a homeowner needs to relocate for a job, or they need to move for other reasons, the downturn can make selling a home difficult. The market is in a seemingly unbearable slump, and most economists are predicting that the market will remain sluggish for awhile. And while there are people who are selling their homes, many are doing so at a loss, either because they owe more than the home is worth, or because it won’t yield what it once could have.
For some would-be sellers, the solution is renting out the property for the time being, rather than suffering a loss from plummeting home prices. Property values have declined significantly, and it may not make sense to sell now and lose the equity that would be gained by waiting for the market to improve.
Choosing to be a landlord may not be for the faint of heart though. You need to be prepared to screen tenants thoroughly, negotiate a properly executed lease, deal with the possibility of late payments and evictions, and handle complaints and annoyances. For those reasons, and many more, most homeowners who decide to rent their home rely on the services of a professional property management company.
“A tenant who looks good on paper can actually end up being the worst if not properly screened,” said Michelle Petersen, Broker-Owner of MPC Property Management. “It’s important to enlist the services of a licensed property management company to help find the ideal tenant, ensure the proper paperwork is drafted to protect all parties involved, and to take care of all the details associated with having a tenant”.
Homeowners that decide to rent their home will also need to keep detailed records of the income and expenses associated with the property to take full advantage of the tax benefits associated with owning a rental property. Professional property management companies use specialized software to report this information, and to provide required documentation for tax purposes. In addition to potential tax benefits, homeowners may be able to “cash flow” on the property if the rent collected exceeds the mortgage payment on the property.
Although renting instead of selling isn’t a solution for everyone, for those that can make it work, it opens up the possibility of riding out the real estate storm until the days of higher prices return.
Weak housing sales are turning a number of homeowners into landlords as they opt to rent their house rather than lose money by selling low in the down real estate market.
MPC serves the growing need for reliable, professional property management in Kenosha, Milwaukee, Racine, Rock, Walworth and Waukesha counties. Years of experience in property management and real estate investing gives MPC a unique advantage that allows them to serve their clients with proven techniques to maximize the profit and potential of their investment.
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