Last week I had an interesting conversation with a friend who owns a home in Ft. Myers. He was debating whether to sell or rent. Fortunately for him, he just got a well paying job on the east coast of FL and is leaving soon. The problem is, the big house with an even bigger mortgage payment isn’t going anywhere. The reality is a lot of people are in the same dilemma given our current market conditions. Maybe you want to move into a different home locally, but your current house was bought at higher price than it’s worth now. Here are some things to consider when making the decision:
- If rents are higher than your monthly overhead of keeping the home, then renting could be a great solution. Why not keep the house, get the tax write off and make money every month? However, if you are in an adjustable rate loan or an interest only loan, I’d consider selling it. That mortgage could come back to haunt you.
- If you owe more than the house is worth and you can qualify for a short sale, this might be the smartest option. Look at it like a business decision and don’t be afraid to cut your losses. Consider keeping the home if option #1 applies.
- If you are moving and the house will cost you money each month to keep, most likely you need to sell it. A big part of our housing collapse was the attitude of “it’s only costing me a few hundred dollars each month to keep this house.” That’s terrible thinking, especially in a declining market. Why lose your hard-earned money each month and throw it into a money pit that is a deteriorating asset?
- Will the home need repairs and outgoing expenses in the short-term? If so, do you want to eat those expenses or should you sell it so a new buyer can take them on?
- The market is improving currently. Renting it for a few years might allow you more profit in the end by holding out to sell it. However, be careful – there is talk of “shadow” inventories of foreclosures that are yet to come onto the market, so I wouldn’t bank on high appreciation anytime too soon.
Bottom line – think with your wallet. If you are way under water and it will cost you money every month even after taking in rental income, most likely you need to sell it. If that’s not your case, then renting it might be the best option.
Need help Selling, Buying, or with Property Management? Please contact Gabe for advice at: 239.825.2234, Gabe@GulfPointeProperties.com or www.GulfPointeProperties.com Gabe Mellein is the broker of Gulf Pointe Properties, He has 8 years experience in the SW Florida Real Estate Market. He is a member of The Naples Area Board of Realtors, Bonita Springs – Estero Association of Realtors, Realtor Association of Greater Fort Myers and the Beach, The Florida Association of Realtors, The National Association of Realtors, and is nationally certified in Feng Shui for Real Estate.