Property Management – Studio City

The recovering housing market has many people looking to move, but current homeowners might be confused on whether it’s better to rent or sell their current home.

The shortage of inventory in some markets have created bidding wars that are favorable to sellers, however those with an underwater mortgage may have to pay to sell the home and waiting out home price appreciation by becoming a landlord may be a better option.

For those who bought their homes at the height of the market, the value will not reach that level for many years, according to Cara Ameer, broker associate and Realtor at Coldwell Banker Vanguard Realty based in Ponte Vedra Beach, Fla. “Markets go in cycles and there will be another real estate downturn again.”

Whether you should rent or sell your home addresses the question: how much can you sell your home compared to what you still owe. Regardless of what you decide, experts suggest knowing your competition to know how to price your home for sale or rent.

Becoming a landlord can mean a lot of work, says Ameer. It’s a very subjective decision—there’s no formula.

On the other hand, owning a home costs money. “Real estate is capital intensive and you always have to put capital into it to keep it up,” says chartered financial analyst Robert Stammers, director of Investor Education for the CFA Institute. “There’s always money you have to put in because the asset’s depreciating.”

Since your current home could hamper your purchasing power of another property, experts suggest answering a few questions to make the decision process easier.

Question No.1: How much can you charge for rent?

“If you owe more than what you can sell it for and you have to leave the house anyway, look at how much you can rent the house for,” says Ameer. Consider whether the rent that you can charge will pay for the monthly mortgage payment, taxes and insurance or if you have to cover the difference every month.

By Andrea Murad