If you own real estate property, you may be wondering whether you should sell it or rent it out. There are pros and cons to each decision but it will ultimately come down to the market and whether or not you're cut out to be a landlord. Some investors prefer to hold their properties with tenants in place while others would rather sell and reinvest their profit elsewhere.
The real estate market is like a living entity that's always changing and that can turn on a dime. It breathes in and out depending on multiple aspects such as availability of housing, economic forecasts, and the health of employment. Trends tend to point out directions and smart investors watch these signposts with regularity. If housing prices are trending upward, an investor might want to hold on to a property with a tenant in place and sell later when the prices are higher. If housing seems to be going downward, some owners opt to get out quickly before the value drops further while others prefer to ride it out and sell when prices go back up.
Since real estate trends for selling versus renting out a property vary by region, it's wise to ask a knowledgeable local realtor for advice. You might read on the front page of a national newspaper something about housing that is untrue for your locale. During the latest housing decline, certain states in the U.S. were hit hard while others remained unscathed. Even in the same city, trends regarding values vary by neighborhood and part of town. It's crucial to find a realtor who is familiar with your part of the city.
An important question to ask yourself if you're trying to decide between selling your property or renting it out is whether or not you're cut out to be a landlord or landlady. Being a landlord is not for everybody. It's like a part-time job unless you hire a property manager. You will need to show your rental to prospective tenants, have them sign a lease, collect rents, and repair anything that breaks. You must have a substantial emergency fund to tap for repairs, vacancies, and other unforeseen issues. If you decide these duties would drive you nuts, you might sell and reinvest the cash in another way.
When you own a piece of real estate property, there may come a time when you wonder if it's time to hold it with a tenant in place or to sell it. Every situation is unique. It would be wise to get some sage advice from an experienced realtor, do some soul searching to decide if you're landlord material, and go from there.