When the times comes to move on from your current property, you may be left wondering: “should I sell or rent my house”? While putting up your property for sale on the market may be the most common choice, you can also rent it out as another stream of income. It’s best to watch out for housing indicators to aide in your decision. Learn more about the four housing indicators you should watch out for when it comes to selling or renting your home in this month’s blog.
Are home sales high?
Home sales indicate how much competition there is for homes on the market. If home sales are high, then that means more buyers are moving into the area and are competing for real estate. You’re more likely to get a higher selling price if you sell your home while home sales are high.
This is the opposite when home sales are lower and on the decline. In this case, fewer buyers are moving into the area which means there is less competition and buyers have more choices. With lower sales, consider renting out your property and then selling it when home sales increase again.
Are home prices on the rise?
Knowing the average selling prices of homes can help you determine if selling or renting your home will be profitable. High home prices are good for both leasing and selling your home and you’ll be able to secure a higher selling price. You’ll also be able to charge more rent since more people will be moving into the area and there are fewer homes available.
How is the housing supply?
Understanding the competition for real estate in your area is key in determining when to sell or rent. Housing supply indexes let you know how many vacant home are available for sale in your area and are strongly correlated with price. If the housing supply goes down, this indicates that there is more competition for real estate – which in turn drives up the property prices. When the housing supply is low, you may want to consider putting up your home for sale to quickly attract potential buyers.
If there is a high housing supply or there are many vacant homes available for sale, then that indicates there are most likely fewer buyers looking for a home. You’re less likely to profit from a high selling price in this case. You may want to consider renting your home until the home supply in your area lowers.
How affordable is the rent?
Rental affordability refers to the percentage of an average family’s income that goes towards paying rent. Low rental affordability means you can attract more tenants if you decide to rent out your home. However, you may be limited in how much you can charge for rent.
High rental affordability means that the rental property in your area is more expensive. This can be tricky for landlords because although you’ll profit more in collecting rent each month, you’ll most likely have trouble finding tenants who can afford it.
Overall, renting makes more sense if you owe more on the property than you can sell it for and if the housing market is currently weak in your area. On the other hand, selling your home is best when there is a high demand for homes due to more buyers wanting to move into the area. If you want to make profit, you’ll need to crunch those numbers while keeping an eye out on the current housing market.
To learn more about the housing market and for more mortgage advice and information, visit American Mortgage Resource, Inc. We provide the best financial resources in Massachusetts and our team is here to help you with all of your mortgage and home loan needs.