Renting the Home

The decline of Tampa Bay area home values has many wondering: should I sell my home now, or should I find a tenant and rent the home until values increase? Other homeowners may be looking to move-up to a new home and keep their old home as an investment property that generates rental income.

For many, renting out their home would to postpone the pain of taking a loss. If the current rental market will allow you to charge enough rent to offset the monthly expenses, and if you are comfortable being a landlord, then this may be a solution.

Long Term Decision

We have not met many sellers who are happy with home prices in the Tampa metro market. If you owe more than your home is worth, then the prospect of bringing substantial funds to closing is not a realistic or pleasant alternative for many homeowners. Tampa home prices will eventually rebound. This should be viewed as a long-term decision, however, as home prices are expected to fall further and the gap between a home’s value and what you owe could increase.

Many Tampa Bay neighborhoods have seen prices fall by 50%. In order for home values to recover to previous highs within seven years, we would need to have 10% annual gains starting right now. What are the odds that housing value start increasing at twice the historical rate and continue for seven years?

Investment Portfolio

Owning rental property is an important compliment to long-term wealth building, but there are some disadvantages to consider. Are you ready to become a landlord? Do you have the time and temperament to deal with tenants, repairs, damages, attorneys, statutes, vacancies and evictions? Should you hire a rental management company?

Are you aware of IRS accounting regulations, Florida legal requirements, and HOA rules for landlords? Will you maintain separate accounts for deposits?

Did you know that property taxes will increase when the home is no longer a primary residence and the homestead exemption is removed?

What does it cost to change the homeowners insurance policy to cover tenants?

Will you pay for yard service and set aside reserves to cover: vacancies, replacing carpet, painting and repairs?

It is nearly impossible to sell a home while occupied by a tenant, hence you are committing to the property for at least a year regardless of market conditions or your personal circumstances.

Maintaining rental property could be a great alternative, but the true carrying costs and time burdens should be carefully considered.

Deciding on which route will be best for you and your family’s future is critical. As Certified Distressed Property Experts, Annette, Doug and Dale Bohannon have been trained to assist homeowners evaluate all the options. Contact the Bohannons at Coldwell Banker Residential Real Estate in Tampa, Florida for a confidential review.