It’s definitely a dilemma and sometimes a tough one to resolve. Should you sell or rent your townhouse in Cincinnati?
People are most often left with this decision if they need to relocate for a job opportunity, or because they’ve decided to take an extended vacation. Whatever the reason may be, they are left with a tough choice on what to do with their current home, with some big financial and emotional ramifications. There is, of course, no one best across-the-board answer for every townhouse owner and every situation. Everyone’s situation, requirements, and expectations are unique. So we offer below some questions you can ask yourself to determine what’s best for you.
Should You Sell or Rent Your Townhouse in NKY or Cincinnati?
Will it produce cash flow?
The first step in answering “Should you sell or rent your townhouse in NKY or Cincinnati?” is listening to what the math tells you. If you’re considering renting, you absolutely must determine whether the property will produce a positive cash flow.
If you’re thinking about becoming a landlord then here are the factors that you need to consider: Can the rent cover the mortgage payment and will it allow you to have an extra for any possible repairs. After you deduct all the monthly expenses from the rental payments, will there be money left over? Be sure to take into account all the expenses – utilities, mortgage payments, taxes, insurance, management costs, vacancy costs, repairs, HOA dues, and any others. If, after doing this math, you see that you’ll realize only a very small profit or could be facing a loss, then selling is probably your better option. Your goal is to collect and maintain a monthly rent that will cover the mortgage and tax payment and all other expenses that your townhouse requires.
Another option may be to use the townhome as a short-term rental. The boom of homeowners who have used services such as Airbnb.com has changed the landscape for investors and how they view cashflow. Because Cincinnati has friendly laws towards short-term rentals, this may be an option you want to go. However, if you are looking to do this in Northern KY, make sure you check with the local zoning authorities, as it is still hit or miss in different cities as to whether they allow short-term rental.
Will I get a return on my investment?
Next, you need to consider the return on investment (ROI). If you choose to sell your townhouse, you’ll lose about 10% right off the top of the sale price to closing costs, agent fees, and other sales expenses. Then you have to consider whether the property has appreciated and the health of the current market to determine whether you’ll make over and above the original sale price. If it turns out you’ll make very little, it might be better to hold on to the property and rent it for a time, especially if this could provide a decent cash flow.
Am I prepared to deal with tenants?
In trying to find the best answer to the question “Should you sell or rent your townhouse in Cincinnati?” you need to be brutally honest about your preparedness and willingness to be a landlord. Dealing with tenants can be, to put it mildly, unpleasant at times.
Some tenants are a delight to deal with while others – no matter how well you vet them beforehand – require a lot of time, patience, and persistence. And still, others sometimes trash the place they rent, which will require you to make the repairs.
You, can, however, learn the skill of being a landlord over time if you’re willing to put in the effort. If you don’t want to do that but still want to rent, you could hire a professional property management company. It will cost you some, but it will considerably reduce the stress of being a rental property owner.
But if these options don’t appeal to you, then selling might be your best bet.
What are the current market conditions and long-term outlook?
A primary consideration is the current market and the long-term outlook for the area where your property is located. You’ll need to look into the demand for similar rental properties in the immediate area. You will also need to determine the value of comparable properties (if you intend to sell) and the average rental rates for comparable properties (if you want to rent).
You will also need to check into the movement of property values. Are they improving or declining? If property values are going up, you might want to hang on to your townhouse and rent it in order to give it time to appreciate. If values are declining, you might want to sell while you can still make a profit and before the market declines below that point.
So, should you sell or rent your townhouse in Cincinnati? Hopefully, these questions will help you arrive at the best answer for your unique situation.
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If you have questions like: Is it better to sell or rent your house? Is renting out a house a good investment? Is it worth it to rent out your house? Then give us a call! We can provide professional real estate advice all over Greater Cincinnati and places like Fort Thomas, Florence, Erlanger, Milford, Mason, Loveland, Oakley, Fort Wright, and more. We would gladly help you so you can take control of your situation, end the hassles, and get back to living the life you want to live. You deserve to know all of the options available to you right now!