Every coin has two sides. For every thought of buying there is one on the selling side.
The biggest dilema of every real estate / property investor has currently is to sell or to rent out.
With the current downtrending house price, a house investor might assess what price they entered the market and correlate it to the costs they are carrying on the house upkept.
Investors who bought 2 decades ago (in the 90s) and who are sharp enough to exit at the high price during 2006-2007 may have pocketed the profit and reinvest it at the current low. However, how many really are in that fortunate pool, really.
For people who bought at the high or close to the high in this decade are often considering is it worth it to keep the house if the equity is sinking.
Simple calculation to consider :
Selling price - Cost of Selling = SS (Sales Settlement)
Cost of Selling consists of broker fee unless (you use Sell By Owner) and also closing fee or any other legal fee.
One must live somewhere and having a bigger family will be another point in weighing decision on Buying versus Renting that is discussed in my previous entry.
Rental Revenue - Cost of Renting Out = ICF (Investor Cash Flow)
Cost of Renting Out includes property management fee, fixing and maintenance fee, property tax, mortgage payment and association fee.
Now to consider two numbers SS and ICF:
When you can have positive ICF then it is worth it to rent your current your home out. However, one must consider where you should live and if your SS can cover larger chunk to buy the home that you must live in, then you should choose selling your current home.
The biggest dilema of every real estate / property investor has currently is to sell or to rent out.
With the current downtrending house price, a house investor might assess what price they entered the market and correlate it to the costs they are carrying on the house upkept.
Investors who bought 2 decades ago (in the 90s) and who are sharp enough to exit at the high price during 2006-2007 may have pocketed the profit and reinvest it at the current low. However, how many really are in that fortunate pool, really.
For people who bought at the high or close to the high in this decade are often considering is it worth it to keep the house if the equity is sinking.
Simple calculation to consider :
Selling price - Cost of Selling = SS (Sales Settlement)
Cost of Selling consists of broker fee unless (you use Sell By Owner) and also closing fee or any other legal fee.
One must live somewhere and having a bigger family will be another point in weighing decision on Buying versus Renting that is discussed in my previous entry.
Rental Revenue - Cost of Renting Out = ICF (Investor Cash Flow)
Cost of Renting Out includes property management fee, fixing and maintenance fee, property tax, mortgage payment and association fee.
Now to consider two numbers SS and ICF:
When you can have positive ICF then it is worth it to rent your current your home out. However, one must consider where you should live and if your SS can cover larger chunk to buy the home that you must live in, then you should choose selling your current home.
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