Should I Sell or Rent My Home In Tacoma?

You received a job promotion or notification that the military is relocating you to a different base. Or maybe time throughout the pandemic provided a lot of clarity and you are wanting to get back to your hometown to be closer to family. Whatever the case may be- you are faced with the decision of selling your home or renting it. How do you make a smart decision given your current circumstance? Go through these three questions and you’ll gain the confidence that you are making the right decision now AND for your future! 

1. HOW LONG HAVE YOU OWNED YOUR HOME? 

Hold on! This is an important question. If you sell within the first 2 years of ownership, you are liable to pay additional tax when selling your home, unless exempt. The Capital Gains Tax that you will pay could be as much as 25% of your total profit earned on the sale of your home. Talk with your local tax consultant (I’m happy to connect you with one) so you know if you are exempt from this tax before selling. 

If you own your home as an investment property (not your primary residence) you WILL pay additional tax when selling UNLESS you complete a 1030 exchange.

For more information on investment properties, click HERE!

2. WHAT IS YOUR MONTHLY PAYMENT VS. MONTHLY RENTAL VALUE? 

Let’s assume that your mortgage payment is $2,000 per month. Do current comparable rentals exceed the monthly mortgage payment? Are you making money from renting your home, breaking even or losing money? Another question to help answer the questions of should you sell or rent your home is what are deciphering the current market predictions. Homes in Tacoma show no sign of depreciating in value anytime soon; however, in the next few years, experts are predicting slower growth year over year. Weigh the options of selling now and what you’d earn vs. waiting in the future to sell.

3. WHAT ARE YOUR SHORT AND LONG TERM GOAL(S)? 

Owning real estate is a great long term investment. Unlike stocks, owning and maintaining a rental property is not a “set it and forget it” investment. Homes need ongoing care. When making the decision to rent or sell your property, revisit the age of the primary components of your home. How old is the roof, water heater, furnace? When was the last time the interior and exterior was painted? Is your sewer line modernized? Whether these components are old or new doesn’t determine whether you can make your home a rental! It only means that you will likely have less ongoing maintenance if these components are newer. When managing a rental from out of the state (even if you hire a property management company) expect there will be less ongoing maintenance. 

For example, if you know your home is going to need a new roof in the next 5 years, budget for the replacement! The main point here is your monthly profit could be substantially less than what you think, if components of the home need replacement. Year-over-year home value appreciation is 7% in Tacoma, WA. Budget and plan for these renovations if you are committed to keeping your house as an investment property.

 

Looking for more information on weather you should sell or rent your home in Tacoma? CALL/TEXT Realtor Jenny Wetzel (253) 381-9788.

More Resources

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Get In Touch

Tacoma Realtor - Jenny Wetzel

Jenny Wetzel

Call or Text: 253.381.9788

Email: jenny@jennywetzelhomes.com

Fax: 253.381.9788