First the obvious. If you have accumulated equity in your home, such as by paying down your mortgage or from rising real estate values, then selling will give you an opportunity to realize that long-awaited windfall of cash. The main downside is that you no longer own a home and any future appreciation may elude you completely if you need to move again soon.
If this is not actually your primary residence, but rather one where you live for part of the year only, then think about whether it would make more sense to keep using it as a rental property and invest elsewhere instead – after all, those trips abroad are nice once in a while… Also bear in mind though that if there’s some urgency behind why you’re selling then you may be a good fit for selling directly to a cash home buyer.
There may be some tax advantages to selling vs renting. If the existing property must be sold, and the proceeds are used to buy a new home, you may not have to pay any capital gains taxes on either sale as long as you’ve lived in one of the homes for at least two of the last five years. You can also still avoid capital gains by keeping your current house and simply living in it; then if an investor buys it, they will own a rental house that is likely appreciating while earning them income.
It doesn’t make sense if you don’t like where you are moving or if it requires substantial renovations before you move in, especially when expenses continue after closing day
Additional expenses that are not covered in the purchase or sale of a home can be expected after closing. Selling [old_address] is an additional expense and should be considered before making any plans to sell. It takes several months on average from the time of listing until a home sells, assuming no problems arise; therefore, it makes sense for sellers to factor this into their decision-making process about whether to rent or sell. If your needs change significantly between now and then, you may want to consider renting rather than selling.
The Senate version of the Tax Bill would reduce or eliminate all tax deductions for state income, real estate, and sales taxes. If Congress passes this bill, you should reconsider any strategies that are based on these types of deductions to make sure you’re still getting the most bang for your buck in Colorado Springs.
You live in a high-tax state like California where capital gains taxes are higher than average and could exceed your annual savings as a result of renting instead of selling. In states with high property taxes, homeowners who sell their houses may not be able to take advantage of current low interest rates because they will find it difficult to pay off the mortgage
You might not have the ability to sell because you owe more on the mortgage loan than your home is worth on the current market, which is critical to consider when deciding if you should rent or sell your house in Colorado Springs.
In a downturn, your best defense as an investor is the ability to walk away from a bad investment. While this may sound harsh, it does not mean you are a failure or weak when you do so. You are simply using one of the most powerful weapons in investing: Options and alternatives. If your outlook changes dramatically for whatever reason, you can take action on two levels—your financial well-being dealing with your financial health and that of the property—to reduce risk and increase the chances that you will be able to handle any setback without distress.
The first level of options is through being prepared mentally and financially for what could happen in the rental market.
Here’s why investors are using the BRRRR method in Colorado Springs:
It helps you avoid paying broker fees and closing costs when placing a property on the rental market. If you’re a DIY homeowner or looking to buy an investment property that fulfills your real estate goals, there is no better way to go than directly from the seller (also known as for-sale-by-owner). Buying properties by owner allow you to not only save thousands of dollars by avoiding closing and brokerage fees but also expedite your search for house flipping opportunities. Being able to negotiate with sellers directly can lead to incredible deals because they may be eager to sell fast instead of going through a traditional sale process.
Why try to figure everything out for yourself when deciding if you should rent or sell your house in Colorado Springs when HBR Colorado makes selling so easy. HBR Colorado buys houses for a fair price, as-is for cash, usually closing in a matter of days. Call HBR Colorado at (719) 286-0053 or send us a message.