Should I Sell or Rent Out My San Diego Home? Property Management Education

You may have noticed that across the country, home sales are taking off. Inventory can hardly meet the demand, and a lot of that demand is coming from investors. You may be wondering if it’s a good time to sell your San Diego home. 

It might be. But, it might also be better to rent it out. The decision ultimately depends on your current financial situation and the financial goals you have for the future.

When owners come to us for advice, we talk through the unique situation each homeowner finds themselves in. We discuss personal and investment goals and we run a rental rate analysis and a comparative market analysis so that we can evaluate what an owner might earn by selling versus renting their property.

While each person’s financial situation will be a little different and both long term and short term goals are unique, we’ve found that thinking about the following things will lead you towards the best outcome.

Selling Your San Diego Home to Access Equity and Cash 

When the sales market is strong and home prices are in your favor, selling can be your best tool for earning money and walking away from the asset completely. We know that a lot of owners are going to consider selling when they have a large expense such as college tuition or making a down payment on a new home. 

Whatever your reasons for needing a predictable sum of money, selling your property can deliver that. If you have enough equity in the home and you know the sales market will deliver the price you want, selling is an easy way to move on.

However, if you don’t absolutely need the funds or if you don’t have enough equity to net out sufficient cash, renting out your property is perhaps a better idea. 

Renting Your San Diego Home Earns Rental Income and ROI 

Renting out your San Diego property can deliver a number of financial benefits. You will earn a consistent rental income every month when your tenants pay rent. Meanwhile, your real estate asset will likely continue to appreciate in value. A good portion of the mortgage and expenses will be covered by the rent collected, and you’ll continue earning equity. 

The rental market is complicated and always shifting in San Diego, but there will always be a high demand for well-maintained homes. The San Diego market has always been able to rely on a well-qualified and reliable pool of tenants, even during economic downturns. Our military presence, students, and our thriving local economy ensure that. 

Consider Your Tax Exposure 

There may be a capital gains tax on the sale of your home, whereas with rental property, you’re able to take advantage of beneficial deductions. You can deduct the home’s depreciation, which is quite generous by IRS standards. You can also deduct any expenses associated with the home, such as maintenance and professional services like accounting, legal fees, or property management. These write-offs help to reduce your overall tax liability.

San Diego Property Management Services

Selling is better for you if you’re emotionally attached to your property and you don’t think you’ll be able to treat it like a business. 

Or, you could hire a professional San Diego property management company to take care of all the details. This makes sense for you if you decide to rent instead of sell. The laws are always changing, and it’s time-consuming to keep up with tenants and their needs. Managing on your own can be difficult, and it’s easy to make expensive mistakes. Property management is a valuable service.