It looks like things are beginning to shift in the Santa Rosa real estate market. With interest rates rising and competition relaxing just a bit, buyers are less willing to pay the high prices that homes have been listed for over the last year or two. While selling a property was once a no-brainer, the current market shifts and the uncertainty of what to expect next has a lot of people wondering whether they should sell or rent out their Santa Rosa home.
We have some tips that can help you decide, based on our experience as local property managers who also work in the real estate market.
Maybe you find yourself ready to buy a new home or planning to relocate out of the area. Should you sell or should you keep that property and rent it out?
The answer depends on your own financial needs and future plans.
Even in the current market, there are some excellent reasons to sell. Prices are still high and buyers are still looking for attractive, well-maintained homes in desirable Santa Rosa neighborhoods.
But, selling is not your only option.
If you’ve always wanted to become a real estate investor, this is a great opportunity to earn some long-term wealth on your asset. If you rent it out, you might earn even more. Renting means bringing in consistent income every month. It also allows you to keep your property while it increases in value. And, you have a tenant contributing to the mortgage, insurance, and taxes you pay on that house.
Take a look at some of the reasons you might want to sell and some of the reasons you might want to hold the property and rent it out. We’d be happy to talk through your own unique circumstances with you as well.
Why Should You Sell Your Santa Rosa Home?
You’ll want to sell when you need or want the money. You’ll want to sell when you have no plans to return to Santa Rosa, and you’d rather walk away from the asset and all the responsibilities that come with it.
- Sell to Earn Money Right Now
You can sell your home and earn some money quickly, rather than earning money by collecting rent over the long term. This is a great idea.
If you are looking for profit and gain right now, selling is a better idea than renting. You should sell if you need to put a child through college or if you want a down payment for a new house. When you have other investment ideas to pursue or large expenses that need a funding source, sell your house.
- Sell When You Don’t Want Home Responsibilities
Selling also allows you to avoid the responsibilities that come with owning a rental property. You’re not obligated to pay for maintenance, make improvements, or deal with tenants and turnover when you sell your house.
- Would the Home Make a Good Rental Property?
Is your property older? Is it going to require a lot of maintenance and some cosmetic upgrades to make it ready for the Santa Rosa rental market? If so, you might be better off selling your home. Tenants today have pretty specific needs and desires. They want appliances that are upgraded, smart home technology, and extra security. They’re looking for a modern home that looks and feels new. If you don’t think your property will earn you the rental income you’d need and if you aren’t sure tenants would even be interested in renting your home, selling is the better option.
It’s hard to invest thousands of dollars just to bring your home up to a standard that renters will accept. Unless your needed upgrades are minor and cheap, sell the home that just won’t make a great rental. You need to bring in enough rent to contribute to your mortgage and other expenses. If you have constant maintenance needs and ongoing repair bills from year to year, it will be hard to earn any money off your property.
Reasons to Rent Out Your Santa Rosa Home
If none of those reasons to sell really spoke to you, it might be a good idea to consider renting out your property. You’ll be holding onto a valuable asset. And, you can sell at any time.
Some of the best reasons to keep and rent out your home are here:
- Rents are Going Up
Owning a rental property is often lucrative, but it’s especially profitable now when rents are rising and more people are choosing to rent a home rather than buy one. You can take advantage of the tight inventory and the high demand for good rental property. There’s a great pool of well-qualified tenants to choose from in our market. Vacancy and turnover rates are low.
- Will You Wish You Kept that Property?
If you’re relocating out of the Santa Rosa area and you’re thinking there’s a chance you may come back, keeping the property and renting it out is a great option. You won’t have to re-enter a competitive and expensive market in order to find a new place to live.
Even with a sales market that’s cooling slightly, California real estate is always at a premium. Buying a home here requires solid financials and a good bit of cash. If you were to try and buy a property again in the future, you might wish you had a home to sell or a home to move back into.
There’s no way to know where prices will be in a year or 10 years. Trying to buy a new home in Santa Rosa at that point in the future may be nearly impossible for any number of financial and logistical reasons. By keeping your asset, you know you’ll have a place to live if you need it. Real property is tangible. It provides housing.
Maybe you’ll retire in this area. Maybe a family member will need a house in a few years. When you keep your property and rent it out, you’re leaving a lot of options open.
- Renting is More Advantageous than Selling for Tax Purposes
Need to reduce your exposure when it’s time to file taxes? A rental property is a great way to access tax benefits and write-offs. Selling a property, on the other hand, will likely come with a large tax bill.
Capital gains taxes could hurt, especially if your home value went way up and you find yourself making a lot of money on the sale. But if you rent out the property, you can avoid that tax exposure. You need to report your income on your taxes, but you can take advantage of several tax deductions and write-offs.
Talk to your CPA or your tax attorney for specifics, but expect to enjoy the following tax advantages if you rent out a property in Santa Rosa:
- You can deduct the home’s depreciation, which is pretty generous by IRS standards.
- You can deduct any expenses associated with the home, such as advertising, maintenance, and professional services like accounting, legal fees, or property management.
- You can deduct the interest on your mortgage.
- You can write off any travel expenses when you need to visit the property.
These write-offs help to reduce your overall tax liability and are a great reason to keep your property instead of selling it.
Santa Rosa Real Estate Experts and Property Managers
Maybe you like the idea of renting out your home instead of selling it, but you’re worried about the time and the resources that may be required. How will you find the time to get it ready for the market, talk to prospective tenants, and screen applications? How will you put together a maintenance plan or deal with rent collection and lease violations?
Santa Rosa property managers can help you effectively lease, manage, and maintain your rental property. If you’re worried about how you’ll take care of the home and respond to tenants when you rent it out, understand that you don’t have to do it alone.
There’s no need to worry about marketing and showing your home, finding a tenant, collecting rent, making sure the home is well-maintained, or dealing with legal complexities and liability. To effectively rent out a home in Santa Rosa, you need to understand fair housing laws, security deposit requirements, rent control exemptions, and eviction restrictions.
Property managers do this every day for owners just like you. When you decide to rent out your property, contact a Santa Rosa property manager right away. You’ll need to know how much rent you can expect to earn and what you may need to do to prepare the property for the rental market.
We are uniquely positioned to help you sell your home or rent it out. We can even assist you while you decide whether you’re going to sell or rent. Let’s take a look at your unique situation, and we’ll help you make the decision that’s best for you and your property.
Please contact us at Prestige Real Estate & Property Management. We manage homes in Sonoma County, including Santa Rosa, Windsor, Sebastopol, Petaluma, and Rohnert Park.