Whether it’s for a new job or to be closer to family – whatever the reason – relocating to a new city can be exciting. It can signal a fresh start, a career boost, or returning to a familiar place. What’s not as exciting is the decision about what to do if you currently own a home.
If you own a home anywhere in Santa Clara County, it is likely a sizable investment. You could sell it and cash in on any equity you’ve built or hang onto it and let that equity continue growing. Adding to the decision might be a question many homeowners ask when relocating: Should I rent my home if I move away? Here are some things you should consider.
Your Personal Financial Situation
For some, the decision isn’t a decision at all. Depending on your financial situation, you might feel forced to sell your current home to afford your new one. But if you’re renting or downsizing in your new location, perhaps you’re not financially forced to sell.
In the latter case, renting out your home can be an attractive option. You would earn monthly income while also continuing to build equity. If you have a mortgage, your tenants could be paying it off while you live elsewhere.
Everybody’s financial situation is different, and it’s important to honestly and accurately assess yours before making a decision.
Can You Manage a Rental Property if You’re Out of Town?
Managing rental property on your own can feel like a part-time job, even when you live nearby. Living out of town comes with its own headaches.
You can’t come over to do maintenance or repairs. You can’t drive by to assess the condition of the place. You can’t meet inspectors or contractors when no one else is there to let them in.
The alternative would be to hire a professional management company, preferably one with a solid local track record. If, for example, you own a property in Los Gatos, it would be wise to hire a Los Gatos property management company. They will know the local real estate market and the local codes and ordinances.
Do Your Homework
Do you know the market rental rates for your area? Do you know vacancy rates, the best places to advertise your property, or the best way to screen prospective tenants? If not, you’ll have to do some homework.
However, if you hire a management company, much of that homework is done for you. Using Los Gatos as an example, a professional Los Gatos property management company would determine the rent, provide effective advertising, show the property to prospects, and screen potential tenants. It’s less homework for the rental property owner.
Consider the Risk
If you were to move away and rent your home, managing it yourself and collecting rent might not seem like a problem. In these days of direct deposits and online payments, you can get paid no matter how far away you are.
However, unless you hire someone to manage and monitor the property, you won’t know how well your tenants are taking care of it. One of the most significant risks for an out-of-town rental owner is their tenants neglecting or damaging the property. This will impact the market value, and the costs to repair will not be known to the owner until the tenant leaves. Losing money and rental income due to the home’s condition is a real risk, one that can often be avoided by having someone local keep tabs on it.
If you’re ready to say goodbye to the area and never look back, perhaps it’s comforting to simply cut ties and sell. However, suppose your relocation isn’t going to be permanent, and you see yourself returning someday. In that case, it might make sense to rent your property and use the services of a professional property manager to take care of it until you return.
Valley Management Group provides trustworthy and affordable property management services to owners who have rental properties in Los Gatos and throughout Santa Clara County. Contact us for a free management quote and get one free month of management services when you sign up.