According to research, landlords have an average annual income of $97,000. While this is considerably higher than the average income of the rest of the U.S., it’s also offset by the expenses of owning an investment property. If you own a home and you’re debating whether to sell it or rent it to a tenant, there are an array of factors to consider. Find out why renting your house is likely the best investment and what steps you need to take to find tenants, market the property, and make a profit with these tips from Real Property Management MetroWest/Worcester.
Making Your Property Marketable
Though selling your home can quickly give you access to a large payout, it may ultimately be a sliver of the profit that renting provides. You can further maximize potential profits by keeping your rental property for years — or even decades — and treating it as a long-term investment. In order to do so successfully, though, you’ll need to invest in the maintenance and make it marketable.
You can start by assessing any repairs that should be done before it is rented. Ensure that all smoke detectors are working, there are no water leaks, and the HVAC system is fully functioning. It can help to view the property as a prospective tenant might and identify any upgrades that are necessary before you start searching for renters. In addition to being in generally good condition, prospective renters will look for a property that’s aesthetically appealing. The way your property looks is a major component of its marketability.
Managing Your Property vs. Outsourcing Management
Once you’ve ensured that your property is profitable, you can focus on finding a tenant. If this part of the process doesn’t appeal to you, though, don’t worry — you can outsource it to a property management company. In fact, you can hire a company to handle maintenance, tenant screening, and other tasks that you don’t want to be responsible for. Outsourcing management will cut your profits, but it’s worth it for many investors.
Before you decide whether to manage your property or hire a company, you should look at real estate prices in surrounding neighborhoods and see the average time a home spends on the market. This can help you determine how difficult it might be to find tenants — and whether a property management company would be a worthwhile investment.
Regardless of which option you choose, you should consider establishing a limited liability company (LLC) to shield your assets from liability. A lawyer can help you do this, but they often charge high fees, so a formation service is likely preferable. Every state has its own unique LLC laws. Check yours before you proceed.
Rent Your Home to See Long-Term Profit
Renting your home can be a rewarding and lucrative alternative to selling it. This is especially true if you happen to own property in an area where homes are slow to sell — but fast to rent. To see whether this applies to your area, study the real estate market, including home prices and the average time on the market. If you choose to rent, forming an LLC can help you protect your assets as an investor.
Deciding to rent out your property instead of selling it is a big decision, so make sure you’re prepared to handle all of the responsibilities that come with it. If you’re ready to handle the work related to this endeavor, you could discover that your former home can be a fantastic source of income.
Real Property Management MetroWest/Worcester is the affordable solution to managing real estate in Westborough, MA, and the surrounding areas. With over 30 years of brand experience, we offer industry-leading management services priced to fit any budget. Call (508) 329-6000 for more information.
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