Home Selling in San Jose>Question Details

Home Owner, Home Owner in San Jose, CA

Better to rent out home or sell in the current market conditions?

Asked by Home Owner, San Jose, CA Sun Mar 4, 2012

Is it better to rent out my home or sell it? I could go either way. I am just afraid that if I rent it out, then the people would trash it and I would have to do even more repairs/etc when I want to sell a few years(2-3 years) down the line... or should I always keep one property as a rental property? In general, do people trash their rental property and not treat it the way they would their own home?

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Answers

12
Dear Home owner,

lots of great answers here but there are a couple that I think are important.
1.) In many areas there is a lack of inventory , so if you live in an area that there seems to be little inventory it may be a good time to sell.
2.) Are you in an area that has a higher crime rate, or the schools sub par? If you are and you have plenty of equity in the home then perhaps make it a rental. Of course check with your Tax adviser first .

As to someone trashing your house, yes it is possible and can happen, best advise is to do a very thorough back round check.

Mike Moresco
Alain Pinel Realtors

408-357-8727
Web Reference: http://www.mikemoresco.com
0 votes Thank Flag Link Mon Mar 5, 2012
Rental property would be good investment for retirement. Renting property may be better idea at this time.
Web Reference: http://www.homenet123.com
0 votes Thank Flag Link Sun Mar 4, 2012
If I didn't need the money right away, I would rent it out but only if I lived local and could manage (and keep an eye on) the rental on my own.
0 votes Thank Flag Link Sun Mar 4, 2012
Hi, Obviously, the tax question will be better answered by a tax professional. There can be benefits and pitfalls that are wholly dependent on your financial portfolio.

It is important to know that only 75% of the rental income from your rental will be considered as income used to qualify you for another property.

Will a tenant trash your home? A bad tenant will, absolutely. A good tenant won't. I recently placed three tenants and all are young professionals with small families that are extremely sensitive to the needs of the owner. The owners are pleased. So, don't be discouraged that there is not a good one out there for you.

However, they did tell me some horror stories of people they found previously. It's all in the screening and marketing.

My final thought is this. If you can build a small Real Estate portfolio you will always have a place to live.

I hope that helps.
Good LucK!

You can call upon me if you need any advice.

Michael
http://LosGatosHomesandRealEstateBlog.com
0 votes Thank Flag Link Sun Mar 4, 2012
Hello Home Owner and thanks for the question.

Personally, I have to agree with my colleagues...as much as you might expect us, as Realtors to say "sell", if you don't have to sell, it would make more sense to rent out the home.

As for taxes, we're not qualified to provide you with financial information, so it's best to refer these questions to a qualified CFP, CPA or tax consultant.

Good luck!
Grace Morioka
Area Pro Realty-People's Choice
0 votes Thank Flag Link Sun Mar 4, 2012
What is your equity position? If you have a large loan or are underwater it may be better to cut your losses and sell. It also depends on how much in demand your type of home and area is. Unless you are in a high demand school district it's unlikely to see big gains for several years.
0 votes Thank Flag Link Sun Mar 4, 2012
This is still a depressed Real estate market, although it is beginning to rebound in a hurry. Since January, I have encountered a number of multiple offers and overbids when I represent buyers for the purchase of a house. We have not seen multiple offers and overbids like this for a number of years. However I would say that the Real Estate market here in San Jose still has a long way to go on the upward side.

My recommendation is that if you do not have to sell the home, you should keep it and rent it out.

With respect to damage to the home, if you screen and select your tenants properly, you will find that your tenants are very good people, who will take good care of your house. You do not have to worry about tenants damaging your property if you screen and select your tenants properly.

If you do not want to manage the rental property yourself, then I recommend that you hire a good property manager to manage your rental property for you.


With respect to the issue of taxes, the amount of money that you will make if you keep your property as a rental property is far more than any amount of money that you will pay in taxes.

For more information you may call me on my cell phone: (408)509-6218

Thank you,
Charles Butterfield MBA
Real Estate Broker/REALTOR
American Realty
Cell Phone: (408)509-6218
Fax: (408)269-3597
Email Address: charlesbutterfieldbkr@yahoo.com
DRE#00901872
0 votes Thank Flag Link Sun Mar 4, 2012
Values are lower than many people would care for. If you can go either way, there is a good chance your equity will rise a bit in the upcoming years. If you can afford to rent it, it may mean overall more money in equity. However it does involve the efforts to keep it rented.

Jim Mauldwin
Intero Real Estate
408-863-3020
Web Reference: http://Jimmauldwin.com
0 votes Thank Flag Link Sun Mar 4, 2012
Hello Homeowner,

Depends upon your future financial plan, I know many clients who are landlords and love having that stream of income while their property value increases. At the same time becoming a landlord is not for every one. There is no guarantee that a renter will take good care of your property. You can write a lease agreement with strickter lease terms, such as requiring a co-pay for repairs, schedule to inspect your property while the renters are there. We Realtors can not advice you on financial planning a CPA can tell you about future tax implications etc. If you think you want to sell, talk to some Realtors, see what the comparative market is and go from there. I would love to give you a market synopsis if you like.

Good Luck!
Monica Goyal
408-476-0675
Coldwell Banker
0 votes Thank Flag Link Sun Mar 4, 2012
Dear Home Owner,

You have asked a very good question that is asked a lot these days. My recommendation would be to talk to a good Realtor and your tax person to arm yourself with all the necessary information you need to make very sound decision. Their is lots of information to take in to consideration when making this decision so take your time and make sure you are comfortable with your decision. Good luck.

Regards,

Jim
0 votes Thank Flag Link Sun Mar 4, 2012
Thanks for the answer, Laura.
But isn't there taxes and other things to consider when making the decision? How soon can I expect the market to rebound? It seems like it would take a min of 5 more years...
0 votes Thank Flag Link Sun Mar 4, 2012
If you qualify I would keep it. Prices will rebound and it's silly to get rid of property if you don't have too.
0 votes Thank Flag Link Sun Mar 4, 2012
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