3 Reasons to Rent Out Your House Rather Than Sell It

Why You Should Be A Landlord

Today’s real estate market is an extraordinarily hostile environment for individuals looking to sell their properties at a good price and in a reasonable length of time. Low demand coupled with high supply has led to some of the most depressed real estate prices we have seen in recent memory, for both residential and commercial properties. While there is little positive to see in this situation, there are nonetheless opportunities for real estate owners who take the time to thoroughly examine their options. For example, renting, in lieu of selling, is a terrific way for property owners to generate revenue from their properties, and possibly turn a substantial profit!

It’s a Practical Solution to a Bad Seller’s Market

With so few buyers and such a backlog of supply on the market, renting has become one of the premier ways for owners to monetize their real estate assets. Renting is an abundantly practical way to ride out depressed real estate prices and generate revenue from a property that would otherwise be idle. As the economy improves and demand for real estate increases, prices are bound to improve. Selling your property too early could cause you to miss out on more lucrative offers down the road. Furthermore, with the right price structure, you could have a tenant pay off your mortgage for you!

Being a Landlord Comes With Tax Benefits

Renting a property also entitles you to a number of tax benefits that wouldn’t otherwise be available. These include: interest deductions, depreciation, upkeep and repairs deductions, professional services deductions, insurance deductions, travel deductions, and more. Essentially, almost any expense that you incur that is related to the upkeep of the rental property can be deducted from your taxes. This makes breaking-even and turning a profit from your rental property significantly easier.

You Don’t Have To Give Up the Security of Ownership

Another reason renting, in lieu of selling, is so appealing to property owners is that you don’t have to forfeit ownership to rent a property. This is valuable in many senses. For example, if you leave your home for an opportunity elsewhere and sell it, you cannot move back into that property after the sale is complete, even if the opportunity elsewhere doesn’t work out and you need to return. With renting, you always maintain ownership and have the property to fall back on if you need it. This security is one of the many reasons renting is appealing to property owners.

Rental properties are good long-term investments that can help you minimize losses on idle properties and even make a profit. Renting comes with a number of lucrative tax benefits that help to reduce the share of your income that goes to taxes. Historically, real estate prices have risen over long periods of time, so there is a reasonable expectation that your property will grow in value as time goes by. Furthermore, renting property provides you with flexibility and a safety net, which are especially important should other sources of income in your life decline. In today’s market, property owners understand that renting is a wonderful way to monetize their real estate assets and protect the value of their properties!

Roger D. Eagleton, a real estate investor and co-founder of Five Star Property Management, specializes in helping maximize rental returns by providing investor-focused property management services in San Francisco, California.