Summer is always a busy time in real estate. The children are out of school, more homes are on the market, and many families are moving into new homes and out of their existing ones. While a lot of homeowners choose to sell their existing homes when upgrading, downsizing, or relocating to a new area, others choose to rent out their homes rather than sell. Here are three reasons homeowners are deciding to rent out their homes rather than sell them:
1. Rents have increased since they purchased their home and the rental income will cover their mortgage payment.
Many property owners who purchased their homes several years ago are surprised to find that the income they are able to generate in renting their home will cover their existing mortgage payments. Having positive cash flow in your rental property is definitely a motivating factor.
2. They would like to use other people’s money to build equity.
Property owners who purchased a home and are now in a position to purchase another home realize that they have an opportunity to rent their existing home and allow their tenants to pay down the mortgage while building equity year after year.
3. The equity they have in the home will earn a greater return being kept in the home, than it will in other options.
With interest rates remaining near historic lows, many homeowners are realizing that the equity they have stored in their property will earn a greater return remaining in their rental property than it would in other options they would normally place their cash into.
If you are looking to upgrade or relocate to another property, and would like to find out how much you may be able to rent out your existing home for, give Real Property Management Alliance a call at (808) 445-9500. We’d be happy to provide a free, no obligation analysis of your home.