If you have a home that is sitting vacant or that you’re no longer using, you’ll probably find yourself mulling over your options. “Should I rent or sell my home?” is a common question we get here at Adirondack Premier Properties. Homeowners sometimes want to offload the responsibility or defray the costs of keeping the home, or may look for ways to turn the empty house into an income stream.
Solving the dilemma of should I rent or sell my home is highly dependent on the situation. Ultimately, the decision falls on the homeowner after careful consideration of variables that could affect sale or rental. For example, many communities, including Lake Placid, are starting to put regulations in place for short term rentals.
To make the best decision regarding the future of your property, we suggest looking at the positives and negatives of both options to figure out what works best for you. Read on for advice from our expert Adirondack Premier Properties staff below:
Should I Rent or Sell My Home? – Long Term Renting
With communities starting to put regulations on short term rentals, long term renting is sometimes the only option available to second/ vacation homeowners. Short Term rentals are considered anything under 30 days. When determining what option works best for you, long term renting could be the best if you do not plan to personally use the property.
Some of the benefits of long term rentals include: consistent payments, someone is always there, and you hold the investment long term. As long as renters are living there, consistent rent payments can cover your costs of owning the property. Depending on how the lease is set up, some utilities can even be covered by the tenant.
As opposed to a vacant home, long term renters will likely alert you of any issues as they occur. Repairs are often possible in a more timely manner to fend off larger issues. In the Adirondacks, something going unnoticed like a frozen water line bursting can cause water damage throughout the home.
Finally, when deciding should I rent or sell my home, thinking about your investment portfolio can be a good idea. Real estate is almost always a great investment, so it’s likely you’ll enjoy all the benefits that come with this investment strategy. Worst case scenario, you can always sell the property down the line. Selling it in a better market could lead to more profit.
Long term renting is not without risk and does come with some negative aspects. It can be costly if tenants cause significant damage and you are unable to use the property. If tenants stop making rent payments, this could also create added financial liability for you.
Under New York State’s rental protection, if tenants decide not to pay, it can be costly and time consuming to have them removed due to court and possibly lawyer fees. Another added expense might be hiring a caretaker to handle the grounds and maintain the internals of the property.
On the whole, long term tenants are more likely to leave more damage than a short term renter because they live there full time. Just like your home, living in it consistently creates more opportunities for mishaps. General wear and tear also increases.
Finally, when deciding should I rent or sell my home, consider the implication of a long term lease. Someone living in the house full time means that you can’t use it at all. If this is your second home or vacation home, popping in for a weekend or holiday is impossible unless it is vacant.
Should I Rent or Sell My Home? – Short Term Renting
If the community that your home is located in allows short term rentals, this may be another option. This involves renting the home out in spans under 30-days. This option is great for a second home, vacation home or an apartment that you want to use occasionally while still covering some expenses.
The positives of having short term rentals are higher payments, short stays, and typically minimal damage from each short stay. Generally, property owners can charge closer to hotel prices in the region for short term rentals to increase profits. Instead of making $800/month on a long term rental, you could make well over that during busy tourist seasons.
Tenants are also there for short time frames. This enables you to book multiple guests during the month, or even leave it open to enjoy the property or visit the area yourself. In any area like the Adirondacks where guests often spend a lot of time outdoors and offsite, the amount of time they spend in the property and amount of damage ends up being very minimal. If the weather is good, guests are normally only there to sleep and eat breakfast.
The negatives of having short term rentals may sway your decision of should I rent or sell my home. Consistent rentals aren’t guaranteed, external payments may be hard to execute, tenants aren’t always on site, and communities continue to increase regulation. It may be tempting to focus on short term rental benefits alone, especially investment profit, but it’s important to consider the downside, which can be big, before jumping in.
Depending on the region, rentals could be very seasonal. If the market is saturated with rental homes, you might not be guaranteed to have continuous rentals. Being prepared to have good months and bad months will be something to take into consideration.
Your location relative to the property is also something to consider. If you are not close by, you will need to hire a caretaker/property manager to maintain the property and be on call close by to respond to any issues. Handling all the booking inquiries, scheduling and complaints can also be a big time suck. Some homeowners hire a rental agency to take care of these details. All of these hired services ultimately cut into your profits and increase your overhead.
With the fluctuation of rental seasons and likely periods of the home sitting vacant without renters, issues and damages going unnoticed could be a problem. Hiring a caretaker to check the property on a regular basis when it’s vacant is good insurance against costly damage.
Finally, staying in touch with what is going on in the local community is beneficial. Each community in our local Adirondack region continues to develop their own regulations for short term rentals. Currently, Lake Placid has different neighborhoods where you are not allowed to short term rent unless you previously had a rental permit. Further, these permits don’t renew when the homeowner sells.
Should I Rent or Sell My Home? – Selling
When deciding should I rent or sell my home, the answer may be obvious if you have no interest in dealing with the hassles of renting. The extra expenses and maintenance involved with renting can move you towards selling as the obvious route to investigate.
The positives of selling are many: no maintenance, money not tied up in keeping the property, and more profit potential. The maintenance costs associated with keeping a property scares many people away from renting. Selling the home allows you to avoid these costs completely.
Financial gains could also be probable. Sale profits may lead to additional income enabling you to buy another property or have a little nest egg. And if you happen to sell at the height of the market, you can get even more return on your investment or inheritance.
The negatives of selling include losing an investment and missing the memories made at the property. Real estate is normally a good lifetime investment as housing is always needed. When you sell, you are removing a strong investment from your portfolio. Depending on when you sell, you could also miss the height of the market leading to lower returns on your investment.
Especially for second or vacation homes, missing the memories made at the property when you lived there is also a risk. While memories can always be accessed through photos and family stories, hold on to the property where it all happened can give family members easier access to the past.
In conclusion, deciding should I rent or sell my home can be a tough one. Our agents at Adirondack Premier Properties are knowledgable about the Adirondack sale and rental markets, including regulations on short term rentals. If you are still unsure about which direction to take after reading our tips above, contact us to get expert advice from an agent today.