So you say you’re planning to move? You found a newer, better home and you no longer have any use for your old one?
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Un, are you sure about that? Because instead of selling your property, you might want to consider holding onto it and renting it out. Yes, renting more work, but it can also pay off in some very big ways.
Don’t believe me? You will. Just keep reading.
It’s Quick and Easy.
You know what sucks about selling a house? It takes a lot of time. And I don’t just mean the long, agonizing process of drawing up paperwork, negotiating closing costs, and finalizing the deal. I also mean the longer, even more agonizing process of putting your property on the market, advertising it, hiring a realtor, scheduling showings, and repeating the process for months or possibly even years on end until you finally find someone with both the means and the desire to purchase it.
Fact of the matter is, there’s a much larger number of people looking to rent than there are people looking to buy. Especially for younger people wondering “Should I rent or buy a house?” the answer is usually an emphatic “rent.” Why? Because in most cases, they don’t have the funds or the right credit score or the immediate need to own property of their own. Selling requires a lot of work to find a diamond in the rough. Renting, meanwhile, doesn’t have to bother. The diamonds are practically everywhere.
To Rent Is More Profitable.
Pop quiz: is it better to make a lot of money all at once or to take steady payments of a much smaller amount over a longer period of time? If you said the former don’t feel bad, most people would be seduced by the bigger number and the faster payoff than the slow build-up. In reality, though, you’d be amazed at how fast a lot of money can become not very much money at all. Conversely, all those small, steady payments can add up to much more than you ever imagined.
When you sell your house, you’re done with it. It’s sold, it’s gone, you got your money and you’re not getting anymore. When you rent, however, it’s the equivalent of buying a cow instead of going to the store for dairy products every couple weeks. You can keep milking it until it pays for itself, then continue milking until it starts paying for other things, too.
It Provides Security.
Maybe making a profit isn’t that important to you. After all, you’re not greedy, right? And, besides, you already have a job and an income that covers all your needs. That’s great. But nothing lasts forever, and no job is ever truly secure.
If you only have one source of income, there’s always the danger of losing it. If you have a secondary source of income, though, then losing your primary one isn’t such a problem, because you still have a Plan B. In that sense, owning rental property acts as a safety net of sorts, there to catch you in case you fall.
Remember, once you sell your home it’s gone forever. But just because you’re renting property now doesn’t mean you can’t change your mind and sell it later. If things really take a turn for the worse, you might have no other choice. In situations like that, it’s better to have an “extra” house to sell rather than being forced to sell the only one you’ve got.