Should I Sell or Rent My House in Las Vegas?
Choosing whether to rent or sell your house in Las Vegas can be tough. Well, like most of life’s difficult questions, there’s no right or wrong answer. The secret lies in understanding the options so you can make the right call for your situation. And it goes without saying that everyone’s situation is unique. Below are a few factors to bear in mind when deciding whether to sell or rent your house.
Determine Your Home’s Value
Deciding whether to sell or rent out starts by getting your home’s current value. Real estate websites provide estimates, but the figures are often inaccurate. It’s also important to note the current prices of houses in your neighborhood. Knowing the prices of recently sold properties can be particularly helpful. You can also get a comparative market analysis from a reliable real estate agent.
Your home’s condition also affects the sale value of your home as compared to rental value. For instance, renters, more so than buyers, will be willing to overlook worn out or outdated fixtures because they’re not looking to own the property. If you don’t have the funds to invest in improvements, renting may be a cheaper and more economically sound choice.
Cash Flow
Once you have an accurate value of your home, you’ll want to consider the cash flow. Doing real estate math may seem scary at first, but it’s straightforward. You want to establish whether the property produces positive cash flows. Look into local rent rates and verify whether there is a viable tenant stream. Calculate whether you get a profit or loss when you rent out the property and deduct all expenses such as insurance, mortgage, management, taxes, vacancy, repairs and other associated costs. If the figure is negative, consider selling.
Return on Investment
Another thing to consider is how much profit you would make if you sold the property today. It’s safe to estimate about a ten percent loss of the sales amount to closing costs, agent fees and other miscellaneous sales expenses. If the figure is little to nothing, you’re better off holding onto the property and waiting for the market conditions to improve. Holding on can be especially beneficial if the property can provide positive cash flow in the meantime.
If the option to sell would give you a profit, consider the relative return on investment compared to renting.
Observe the Trends
Las Vegas’s real estate market has been quite vibrant the past few years or so. However, like any real estate market, it all comes down to your particular location. When deciding whether to sell or rent out, it helps to analyze what the future looks like for your home’s location. Issues to ponder about include the neighborhood trend. If things are looking bright, consider holding onto your property for better future returns, but if the future looks dark, selling to avoid future problems would be an ideal solution.
You can leverage the expertise of a real estate professional to help predict market trends, but it’s impossible to know for sure where the market is going. Depending on the location of your house, observe Las Vegas’s growth pattern. Consider whether it’s moving towards or away from you. Analyzing current market trends will help you make an informed decision on whether to hold on for now or sell your home.
Are You Able to Be a Landlord?
If you’re thinking about renting, ask yourself whether you’re willing to be a landlord. Being a landlord requires significant time and patience. And before you become a landlord, you have to conduct your due diligence and do some research on licensing and other laws on rentals in Las Vegas. Fortunately, you can always learn from others in the business and improve your skills over time.
On the other hand, just because you’ve decided to rent your property doesn’t necessarily mean you have to deal with tenants directly. Las Vegas has plenty of property management companies that can help you manage your property with peace of mind.
Capital Gains Tax
According to federal and state property laws, selling property for profit means you’ll have to pay capital gains tax on the sale. Unless you qualify for an exemption, capital gains tax can be very high and is also dependent on your tax bracket. The Internal Revenue Service (IRS) allows a capped exclusion of the sales proceeds for tax purposes of a primary residence if you resided in the house for at least two of the last five years.
Therefore, if you’re exempted from capital gains tax, selling your home would generate decent proceeds. On the other hand, if you decide to keep the property, the chances are high that the property will appreciate in a value higher than what the capital gains tax would have been.
Will You Want to Return to Your Home?
If you’re relocating, either for personal reasons or work, consider whether or not you might return at some point in the near future. If you’ll be returning home and the financials line up, renting out so you have the option to return one day may be worth considering. Alternatively, if your move is permanent, and the conditions favor a sale, then you’ll be better off finding a cash home buyer in Las Vegas.
Can You Afford a Mishap?
When it comes to renting out property, certain catastrophes are the property owner’s responsibility. Broken furnaces, malfunctioning heaters, structural damages or broken pipes are just but some of them. Similarly, if tenants fail to make timely payments, you still have to pay your mortgage. If you don’t have the financial muscle to deal with such unexpected expenses, renting out your house is probably not your best option.
Bottom Line
Ultimately, choosing whether to sell or rent your property boils down to weighing all the options. Should you decide to sell your property, we’ll be happy to buy it from you. We shall purchase your House in Las Vegas for a fair cash price. In fact, we can do an all-cash offer. Forget about lengthy procedures as we take pride in closing fast or according to your preferred timeline.