Should we sell or rent our current home?
Answered by Neil Fjellestad
We get asked this a lot. The answer you settle on can literally make the difference between whether or not you have the kind of retirement you want for yourself including something to pass along to your next generation. So please take a moment to follow this example. Though our expertise is definitive for the San Diego region our advice should be considered elsewhere as well.
Real Case Study- “I have roughly 200K as equity in my current home in san diego. We are going to close escrow on a new home in a week’s time in the same area. I don’t need to sell my current home to buy the new home. Since the renting market is pretty slow now it is harder to find a good tenant. So should we consider selling our home instead of renting it?”
You should definitely hold your current home as a rental if you do not need to sell. It might surprise you to find that many local independent rental owners got their start the same way. Now you need to surround yourself with professionals that can provide consistant property managment and constant real estate investment advice along this new exciting path that can do much to establish your financial independence over the long term. For instance, someone that will help you talk through your investment objectives and financial resources that will prepare you with a long-term startegy for your real estate decisons. Now, let’s return to the property management: first, professionals like FBS can establish a competitive rent rate and get your vacancy filled right away.
You should also know that if your estimated 200k equity does not represent at least 30% of current value then you need to plan to start paying down existing loan balances though refinance or savings. You are going to be in the rental business for a long time and therefore you need to stay properly capitalized. Forget those books and infomercials that preach you can buy for no money and flip for scads of cash. Did I mention you’ll be rich and retired by the end of the year? Remember, if it sounds too good to be it is. But also remember that the reason these lies can attract some is because real estate is the foundation of smart wealth and San Diego rental property captures the most advantages of this wealth strategy but there are correct methods that cannot be ignored.
You can start to educate yourself by visiting http://www.RentSenseBlog.com and check our current availability http://www.fbs-pm.com/rentals We currently operate rental properties in 69 zip codes throughout San Diego and have provided constant advice to independent rental owners and real estate investors for more than four decades.