Author: Katie Conroy
When you have a newly remodeled fixer-upper in Florida, deciding what to do with it can be challenging. If you’re torn between renting it out and selling, here are four steps that can help you decide, brought to courtesy of CaribHomes.
4 Steps to Decide Between Renting and Selling
1. Look at the Financials
Selling or renting out the property affects your finances in different ways. When you sell, you’ll usually get a large lump sum of cash all at once. With renting, you’ll receive smaller payments on a frequent and long-term basis.Which option is best for you depends on your financial situation and broader goals. If you like the stability that recurring income provides, renting the property might be a better fit. If you prefer a large sum that you can use to pay off debt or buy a new home to fix up, selling could be a better option.
2. Check Your Local Market
Exploring your local Florida housing and rental markets is a smart move if you’re torn between renting a property out and selling. At the end of 2021, the median list price for a house in Florida came in at $334,882, while the average fair market rent came in between $771 and $1,610 per month, depending on the number of bedrooms.
It’s important to note that the exact location of the property matters. Each city in Florida is a unique market, so you’ll want to take a closer look at data from the home’s area to get accurate pricing.
3. Consider the Work Involved
The amount of work involved in selling or renting out a property varies significantly. With a sale, you’ll need to handle some basic tasks, like finding a realtor, staging the property, negotiating the sale, and closing the deal. It’s pretty straightforward. If you rent out the property instead, you’ll have long-term responsibilities. As a landlord, you’ll need to find tenants, process applications, handle maintenance requests, and collect rent. If a tenant becomes troublesome, you might have to navigate eviction procedures or other legal issues.Now, you can hire help to assist you with these tasks. For instance, you could work with a landscaper to keep the home’s yard in good shape or turn to a property manager to coordinate activities relating to the rental. But that all comes at a cost, potentially digging deeply into your profits.
4. Know What It Means for Your Taxes
Whether you decide to rent out the property or sell, both options have unique consequences. The tax rules for flipping houses are complex, and getting it wrong can leave you in financial hot water.
Renting out the property also comes with distinct tax implications. Besides reporting rental income, you’ll need to track certain expenses and deductions, which isn’t always easy.Before you decide, you may need to speak with a tax advisor. They can help you estimate the impact of a sale and renting out the property. That way, you’ll know what to expect.
Step 5: Find Your Next Fixer-Upper
Once you figure out what to do with your remodeled fixer-upper in Florida, you may want to pick up a new property to flip or convert into a rental. If so, foreclosed real estate-owned (REO) properties could be a great option if you want to find amazing discounts. What does foreclosure mean? A foreclosed home is one that has been recovered by the lender when the owner stops making payments. Just take amenity access, location, and the cost of needed repairs into account – as well as get a home appraisal – to make sure you’re getting a good deal.
