At one point or another, many property owners find themselves at a crossroads. They own a piece of property and no longer plan to use it for their primary residence. Should they sell it and pocket the returns? Or, should they turn it into an income-generating rental property? And if so, are they better off self-managing the unit or handing over the reins to a property management company?
It’s a two-part question and, unfortunately, there’s no easy answer. As with many difficult decisions, there are pros and cons to each option. It always comes down to your personal goals for the investment.
Deciding Whether to Sell or Rent
There are numerous factors to consider when deciding whether to sell or rent your home. First is your financial position and future goals. Can you afford to hold on to it and invest in a second home? Secondly, how do the returns you expect to earn on the property compared to other investment opportunities?
Next, you should seriously consider whether you are willing to be a landlord. Even with the help of a property management company, you will still have to make final decisions, and those decisions will not always be easy.
Lastly, there is the emotional component. You’ve likely made a lot of memories in your home. When you make the choice to rent your home, the property becomes an asset. That means you need to think rationally, analytically, and coldly about the property as an asset and not one filled with family memories that need to be protected.
Self-Manage or Partner with a PM Company?
If you’ve decided to hold on to your home and rent it out, the next consideration is whether to self-manage or get help.
If you enjoy managing rental properties and have the time and resources to do so, there’s no firm need to hire help. That being said, people often mistakenly believe they will eat into their profits if they pay a monthly fee for someone else to do what they can manage themselves.
The numbers, however, tell a different story. Property management companies have the resources, skills and experience to increase your property’s performance while reducing your expenses.
Hiring a property management company that charges $99 per month, for example, but is then able to increase your rent, your net operating income (NOI) and your property value while also reducing your expenses because they have pre-negotiated rates with repair companies is a huge win for owners
As you evaluate your options for growing your investment, keep these considerations in mind and don’t hesitate to ask us your questions. At RL Property Management, we take great pride in being able to help our clients in Franklin County improve their returns and look forward to helping you, too. Contact our team to learn more.
