If life just threw you a curveball and you need to move, you may be wondering if you should rent or sell your South Lake Tahoe real estate. On one hand, selling your South Lake Tahoe real estate allows you to have the cash required to buy your next home but renting allows for a long term monthly income. Of course, playing landlord if you don’t intend to allow a property management company to handle renting for you can cause quite a bit of headaches. So, which one is best for you? Ask yourself these questions to help you decide.
Can you afford two homes? This is the number 1 question you should ask yourself. Two mortgages, two maintenance bills, two insurances…..this may seem like a good idea at first but if double the homeownership duties isn’t something you can financially handle, selling your South Lake Tahoe real estate may be the answer. However, if this is a scenario you can do, find out if you qualify for a mortgage with both the rental and the home you will be purchasing as your full-time residence. You may even have enough equity in the home you would be renting that you can pay off the balance and end up with one mortgage and two houses.
What are rental rates in South Lake Tahoe? Currently in South Lake Tahoe, the inventory for rentals is very low as the demand for rentals is very high. You will want to figure out what the local rental rates are to make sure that you get the income stream to make owning two homes financially worth it. After all, you don’t want to spend more money on a rental than you bring in. However, remember that most of the costs that go into owning a rental can be written off come tax season.
Will your old property gain value? After you have established the financial pros and cons, chat with your local South Lake Tahoe realtor about the market conditions. You will want to talk with someone who has been in real estate in South Lake Tahoe for a long time so they know the past, present and future conditions. Home prices in South Lake Tahoe have gone up 13.7% and the month supply is 3.6, which means we are in a seller’s market. If there is a strong chance your home will appreciate, it may make sense to hold on to it. However, if interest rates continue to rise, buyer interest and market conditions may slow down which means prices may not continue to increase at the rate they have in the last year. While demand for housing in South Lake Tahoe is still high, there may be other markets that could level out due to a variety of factors such as low demand, an influx of new housing, etc.
Can you really oversee the rental? Can you handle being a landlord? It isn’t for everyone. There is some stress that comes along with it. There is interviewing applicants, doing background checks, maintaining the property and much, much more.
Will you ever want to return home? South Lake Tahoe is desirable place to live. If this move is temporary and you intend on moving back, hold on to the home and rent it out. If you know you won’t be returning and the thought of being a landlord is too much, it may be time to part ways completely.
If you have answered all these questions and still find yourself at a loss, feel free to contact me. Not only am I a long time, licensed Realtor & president of the board of Realtors in South Lake Tahoe, I also run Tahoe Property Management and Pinnacle Lake Tahoe Getaways. Whether you want to buy, sell, rent long term or rent your home out to vacationers, I can help. Give me a call to discuss our scenario and I can advise you on which one would be the best avenue for you.