Should You Sell Your Property or Keep It as a Rental?

Should I sell my property or keep it as a rental? It’s a common question our clients at Evergreen Real Estate Partners often ask, and we want to share our perspective. I’m a huge fan of keeping real estate for the long term. I don’t know anyone who has regretted holding onto their property.

Most people I’ve talked to only regret selling. Think about it: you probably know someone, maybe a friend or even a grandparent, who sold their house. They drive by it often and can’t help but think, “If only I had kept that property, it would be worth $1 million now.” With that in mind, I’m here to provide some insights to consider whenever you’re considering selling your property.

Don’t sell your asset unless you absolutely have to. If there’s a way you can keep your property as a rental without over-leveraging yourself, that’s always my top choice.

To figure this out, you need to consult a mortgage professional who can help you understand your debt-to-income ratios and ensure you can afford to keep the house as a rental. If you’re unsure whether this is the right option, we can connect you with our trusted mortgage partner.

Once you determine if keeping your property as a rental is feasible, you can decide whether to hold onto it or consider selling as your next move. If keeping the property as a rental is an option, here are some key factors to consider:

• Do your research. Talk to a property manager about rental rates in your area to help you understand what you can realistically charge for rent.

• Interest rates and payments. Consider the interest rate you secured when you bought the property. You might be in a favorable position if you have a great rate and your monthly payments are reasonable, while rental prices are high in your area.

• Evaluate your cash flow. I have a couple of rental properties, and they cash flow nicely, allowing me to set aside extra funds for any vacancies or maintenance needs that may arise.

Again, it’s smart to consult with professionals like your mortgage lender, property manager, and real estate agent to determine what you would net if you sold. You can compare these numbers with your potential rental income to help you decide if keeping the property makes financial sense.

What are the risks of keeping my property as a rental? First, having tenants can be unpredictable. Ideally, they pay rent on time and care for your property. But we’ve all heard stories about difficult tenants who don’t pay or cause damage, and those situations can happen.

It’s important to be prepared for the worst-case scenario. If a major repair, like replacing carpets or fixing appliances, would significantly harm you, then being a landlord might not be the best choice for you right now.

If you can set aside some cash as an emergency fund, it could make keeping the property a viable option. This way, you won’t be in a tough spot if something goes wrong. Get insights from real estate professionals specializing in rental properties to help you make informed decisions.

We love supporting people in building wealth through real estate and holding onto their assets. If there’s a way to make it happen, we’ll be cheering you on throughout the process. Feel free to reach out anytime at (360) 560-1156 or jacqueline@evergreenrealestatepartners.com. We’re here to help.