What Should I Do if My House Won’t Sell?
Ever wondered why your house isn’t selling in today’s unpredictable market? Factors like fluctuating interest rates, inflation, and changing demographics can all impact your home sale.
But what if there was an alternative that not only solves this problem but could also work to your advantage?
Instead of struggling to sell, consider renting your property to a quality tenant. Renting offers numerous benefits, including a steady passive income, tax advantages, and increased equity.
In this guide, provided by First & Main Property Management, we’ll explore the advantages of renting out your home and explain why hiring a property manager could be the key to maximizing your investment.
Keep reading to learn more!
Benefits of Renting out Your Home
Keep All Options Open
Renting out your property offers a range of benefits, it allows you to keep all your options open.
You can wait for a seller’s market to maximize your profits when you decide to sell, or you can choose to move back in at any time.
The rental income you earn can support various financial goals, from bolstering your emergency fund and retirement savings to paying down debt, supplementing your income, or funding your vacations and personal interests.
Earn Potential Passive Monthly Income
Passive income is perhaps the single largest motivator for rental investments.
Once you invest in the right property and find the right tenant, you could set yourself up to earn a passive income for many months to come. This can be a great option, especially if you’re looking to make extra money aside from your main income.
In addition to earning a passive income, you may be able to enjoy rising property appreciation rates and reduced tax bills.
Build Equity With Relatively Little Output
Equity is the difference between your property’s value and any debts owed on it. You can build equity in several ways when renting out a property.
For one, you can build it by ensuring the cash flow is positive. A positive cash flow means that the rent exceeds the expenses. You can then use the cash flow to pay down the mortgage principal, thereby increasing your equity in the property.
Over time, the market value of the property may increase due to multiple factors, such as rising real estate prices, economic growth, and property improvements.
In Napa, California, for instance, home prices were up 18.4% in June 2024 compared to last year according to Redfin.Com.
Also, as a landlord, you may be able to qualify for certain tax deductions. And the lower your taxable income, the more equity you can build in the property.
Maximize the Tax Deductions
Landlords can claim certain deductions to reduce the taxable rental income such as mortgage interest, property taxes, maintenance and repairs, utilities, and depreciation.
Aside from property expenses, you could also make certain deductions on the following:
- Costs associated with advertising vacancies.
- The cost of hiring a property manager to manage the property on your behalf.
- Your traveling expenses, when traveling to collect rent, inspect the property, or handle other duties.
- Costs associated with hiring professional services, such as accounting fees for managing rental income or legal fees for drafting leases.
Benefits of Hiring a Property Manager
Renting out a property offers many advantages, as we've discussed. However, being a landlord also presents its own set of challenges. You might face difficulties in finding the right tenant, effectively advertising vacancies, or staying compliant with legal requirements.
This is where a property manager can make a significant difference. A skilled property manager can take on these challenges for you, ensuring that you attract ideal tenants, set optimal rental rates, and maintain the property to the highest standards.
With their expertise, you can maximize your rental income and enjoy the benefits of property investment without the hassle.
Rental Property Marketing
Marketing a rental property involves more than just placing “For Rent” signs or listing it in local newspapers.
A property manager can significantly enhance your property's visibility by writing a good property listing and promoting it across the most effective platforms, ensuring it reaches the right audience and is filled quickly.
Tenant Screening
A good property manager can help you conduct a thorough tenant screening process to find high-quality tenants for your rental.
The screening process usually entails checking the tenant's income level, employment status, creditworthiness, and rental background.
As a result, you can rest assured that you’ll rent to a reliable and trustworthy tenant who pays rent on time, reports issues on time, cares for the unit, and stays for the long term.
Rental Maintenance
In addition to securing a reliable tenant for your property, a property manager will perform regular upkeep and respond promptly to emergency repairs.
They are well-versed in the warranty of habitability and will ensure your property adheres to all local safety and health codes, providing peace of mind that everything is up to standard.
Legal Compliance
Legal compliance is important when it comes to renting out a property. It requires that the landlord comply with the relevant landlord-tenant laws.
For instance, the fair housing laws, habitability rules, landlord entry rules, and security deposit laws. Failure to comply with any of these laws can lead to severe financial and legal repercussions.
Luckily for you, a property manager can help you in this regard as well.
Conclusion
If you’re finding it challenging to sell your home, renting it out can be a smart alternative. This approach allows you to enjoy the benefits of rental income while keeping the option to sell open for the future.
For expert assistance in renting out your Napa property, turn to First & Main Property Management.
We offer tailored and comprehensive property management services to help you maximize the potential of your rental. Contact us today to discover how we can assist you!
