Should You Sell or Rent Your Home?thelasvegasluxuryhomepro.com /blog/should-you-rent-or-sell-your-house.html

Residential Real estate Investments are still regarded as one of the best vehicles to grow personal networth. Today's interest rates are at historical lows.

If you can afford to buy your new home without selling the current home, renting may produce a betterlong term result than selling. This is especially true if you are in an area where home values are expectedto appreciate over the next several years.

I asked Jake Durtschi, the owner of Jacob Grant Property Management for advice. This was hisresponse -

Thank you for reaching out! These are a few questions I would ask --myself if I wasconsidering renting vs selling.

Acting like a homeowner includes connecting emotionally with your home :-making improvements to maximize enjoyment-personalizing aspects for family members -connecting with the home

Acting like an investor includes impersonal assessment:-Request comparable rent analysis from local property manager.

-Talk to local property manager to determine average vacancy and maintenanceexpense for area.-Will rent income less average vacancy cover expenses and mortgage?

Crossing the bridge from homeowner to investor can prove to be very difficult. After makingthe emotional connection with your home, it is difficult to disconnect. If a homeowner candisconnect they need to be able to create a viable business in which income is greaterthan expense. Normal risks of landlording need to be outweighed by potential profits.

Holding on to a property that is upside down in order to let the market "rebound" may be aneffective approach in certain markets. In many markets it is prolonging the inevitability offoreclosure or paying to sell your home.

Steps To Consider When Deciding to Sell or Rent Your Home -

Your home is one of the most important investments you will make. It does not hurt to explore your optionswhen it's time to move on to a new home. We suggest considering the following steps when deciding ifyou should sell or rent the current home.

First Step - Find out how much home you can afford. Do you have enough in savings to make thedown payment on the new home? Don't forget closing, moving and other out of pocket costs.

Talk with a lender to see if you can get a mortgage on a new home without selling the current home. Let

the lender know you plan to turn the existing home into a rental property. If you have equity in the existinghome, your lender may be able to help you do a cash out re-fi that will help cover the down payment on thenew home.

Second Step - How much will tenants be willing to pay to rent your home? Do homes in your arearent quickly? Ask your Realtor to show you the rent comps. Will you be able to charge enough rent tocover the monthly expenses of owning the current home? On top of the mortgage, you'll need landlordinsurance. You'll have to allow for repairs and for vacancy in case the tenant moves out and it takes awhileto find a new one.

Step Three - Are You LandlordMaterial? Being a landlord is not easy. Even the best tenants can beannoying when they call at 3 a.m.because there's a leak somewhere. And how do you screen tenants toavoid renting to the wrong person? You know? The one who never payson time, throws wild parties and getscomplaints from the neighbors? Areyou prepared to evict someone whogets out of line?

Hire a reliable, experienced propertymanager. They will earn every centyou pay them. You can avoid having tohandle the unpleasant, day to dayissues of being a landlord with a goodproperty manager. Seth Williams offers great interview questions in "Finding The Right PropertyManager." Bigger pockets provides "5 Red Flags to Look For When Hiring a Property Manager ".

Step Four - Be Prepared For the Un-expected. Even the best property management companies cannever totally predict what a tenant will do. A friend recently rented his investment home to an elderlygentleman. Leo was the perfect tenant. Calling to say he had the rent check a week ahead of time. Hehad a nice pension and could afford the home. Things were too good to be true for a few months.

Then he disappeared. None of the usual, "Hey, I've got the rent check. When will you be coming to pick itup?" Landlord started calling and texting. After a few days, Leo finally texted back. He explained that hishealth had worsened and he had to move near his family in Florida. He offered "let me know if I owe youanything." Yes, he had a deposit on the home. It didn't quite cover the un-expected loss of income whilefinding a new tenant. Or worse, the time and money needed to haul off the garbage that was left and getrid of the smoke smell. Oh, did I mention the lease stated it was a "no smoking" property?

The management company will do their best to prevent scenarios like this one. They will collect depositsthat will cover typical damages. As the owner, you should be prepared that sometimes you may still haveto come out of pocket. You can always go after the tenant, but that takes time. Best to get the homerepaired and find a new tenant.

Step Five - Tax Implications and Financial Planning. Discuss the move with your accountant andfinancial advisors. If you have lived in the home for 2 of the last 5 years, you may be better off to sell it. Bill Gassett discusses "Real Estate Capital Gains and Your Home Sale ".

In general, single home owners are allowed up to $250,000 profit before they pay capital gains taxes. Married homeowners are allowed $500,000. If you have this kind of equity in your home, you may dobetter to take advantage of the tax free profit. If you don't have this kind of equity, you may be better offrenting the home.

Your tax accountant can suggest the best strategy for handling taxes when you sell your home. If you turnthe home into a rental, you may not be able to use the home owner deduction. You should explore using a1031 exchange to defer taxes.

Is Renting The Right Move For You?

Investing in real estate can be rewarding. It's only rewarding if you can afford the investment and youmanage it properly. We've had several home owners who opted to rent their homes until the marketimproved. One of our clients bought her home in 2011, the bottom of the market. Six months later, shemarried the love of her life. They moved to the Midwest and she rented the home to a friend.

She called us a year later. The friend had stopped sending the rent checks. She wasn't sure if they wereeven still living in the home. We referred her to a property manager. (One thing our team doesn't offer isproperty management. We don't like those 3 a.m. phone calls anymore than you do.)

The property manager we referred went knocking on our client's door. He explained to the surprised guywho answered that the rent hadn't been paid. Before he could evict, the rent was brought up to date. Theycontinued renting for another year until giving proper notice. We listed the home after the tenants moved

out. She sold it for a nice little profit.

One of the side benefits to buying your new home without selling your current home? You will be able tomove into your new home before buyers or tenants come to see the current home. And, if you plan for aproper holding period, you may be rewarded with a nice profit in the end.

Debbie Drummond has over 10 years experience in the Las Vegas Real Estate Market. She specializes inluxury homes and high rise properties but works with all types of residential real estate. If you're buying orselling a Las Vegas home, call (702) 354-6900 or email Debbie@LVHomePro.com. She and her team willbe happy to assist you.