Some homeowners are left with a dilemma when it comes time to move. Should they sell, or should they turn their former home into an investment property?
I had a very interesting discussion with someone today who moved into a new home before selling their current one. They wanted to know whether they should rent out that first home or sell it. It’s a very interesting question, one that doesn’t always have a clear answer.
It comes down to what you want to do. I’m all for people owning real estate and using it to leverage future wealth. Before you decide to sell or become a landlord, here are some questions you need to answer:
1. What price point is the home? Not all homes are suitable for becoming rentals in regard to the return that you’ll get.
2. Do you need the money now? If you sell, what are you going to use that money for? What’s the ratio of the rent that you bring in to the money that’s sitting there? It’s all about having those numbers make sense. If you have a $500,000 home with $400,000 equity, is an extra $500 a month worth it in place of that $400,000?
“Not all homes are suitable for becoming rentals.”
Some people simply don’t have a desire to become a landlord. Others do, but they’re not sure whether this is the property they should start with.
There are endless options out there to build wealth through real estate. If you have any questions or want to talk about your situation, don’t hesitate to reach out via phone or email. I look forward to hearing from you.
