Renting out a property that you’ve inherited is one way to become a real estate investor without laying down a lot of cash on an acquisition. You can earn some consistent rental income as well as long-term ROI as your property in the greater Williamsburg area increases in value.
However, there’s a good reason or two to sell the home as well. Especially now, when interest rates are low and the sales market is really strong, you may be tempted to sell the asset and walk away with some money.
Deciding whether to rent or sell the property will depend on how you feel about short term gains versus long term gains. It will also depend on what your own financial plans are for the future.
Here are some things to consider when deciding whether you should sell or rent the investment property you’ve inherited.
Sell if You Need the Cash
This is a good time to make some money on real estate. If you have no interest in being a landlord or allowing your asset to appreciate in value, you might want to sell the home you’ve inherited. You’ll be giving up some steady rental income and you’ll lose a potentially great investment opportunity, but if you really need to earn some cash to make ends meet or send a child to college or invest elsewhere, selling is a good idea.
Rent if You’re Interested in Real Estate
If you aren’t in need of money and you’d like to earn more on this investment, hold onto it and rent it out.
You’ll earn some income every month in rent and you’ll also have a valuable asset that continues to grow in value year after year. This is a lot less risky than stocks and other investments. It’s a tangible asset and people will always need homes to live in.
Emotional Attachments to Property
Honestly assess your current emotional attachment to the property and the person who left it to you. Someone else will live in this home, and you’ll have little control over how they treat it. This may be a home you grew up in. It may have some strong memories and there may be an emotional connection. You’ll have to let go of all that and be willing to treat the property like a business if you’re going to rent it out. If you don’t think you can do that, selling may be your best option.
Prepare for Market-Based Pricing and Repairs
You also need to consider whether you’re willing to invest in the property enough to prepare it for the rental market. You will likely need to take care of some cosmetic upgrades like new paint and new flooring. You may need to replace any old or dated appliances, wall coverings, and systems. The landscaping will have to be taken care of, and you’ll need to invest in marketing and professional cleaning.
You’ll have to spend money maintaining the home throughout the rental period. Make sure you’re willing to do that if you want to rent out the property. If you’re not as financially secure as you’d like to be and you have no idea how you’d pay to replace a water heater or a furnace, you might consider selling the home instead.
Work with Berkeley Realty
If you decide to rent out the property, get in touch with a professional Williamsburg property manager right away. You’ll get support and resources that are necessary to prepare the property for the rental market, find a tenant, and start collecting rent. You’ll also have the peace of mind that experts are taking care of the home while you deposit the rental income.
Whether you’re leaning towards selling your investment property or renting it out, contact us at Berkeley Realty Property Management. We’d be happy to help you work through the options.