Sell or become a landlord? That is the question. A study by Zillow recently showed that more than 1/4 of homeowners considering a move in the next 3 years were considering renting out their home.
This question is being asked more often right now as people either are moving away from the Valley, or want to move up or down to change something to their present lifestyle.
It is asked more often now that values have gone down from, may be, a high purchase price 3 or 4 years ago.
It is asked more often now that banks do not grant "bridge loans" like they used to, and now that rental prices go up (Nationwide, but also locally), and that it seems like just a matter of time until prices go up from where they stand now (even if it is not doing so like it was in the past 15 years).
Today, as many people loose their property to short sale or foreclosure, they need to find a place to live, and this explains in part why there is pressure on rental prices.
If you are faced with this dilemna, consider the following factors:
- your confidence in the future of home values in the Valley,
- the tax implications, which could be positive or neutral for you depending on your tax situation and income, and the way the property would be managed,
- how comfortable you are with 2 mortgages,
- appeal of that kind of diversification of your retirement assets,
- who will manage the property?
- are you cut out to be a landlord?
Thanks for reading,
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