Property management in Las Vegas is becoming increasingly popular as more and more owners are looking for ways to maximize the value of their investments. However, choosing between selling your property or renting it out would prove challenging in today’s market.
Before, market performance could usually tell you whether selling or renting is the best idea. Today’s circumstances leave you in a gray area. With everything on the rise, from interest rates to inflation, demands are different and you need to consider several factors before deciding on one option over the other.
In this post, we explore these factors and present the benefits of each choice.
Factors That Will Affect Your Decision
Today’s real estate market being a gray area gives you a couple of opportunities to meet your goals. Regardless of selling your property or holding on to it for leasing, you are likely after income. However, you must be strategic with your approach to maximize the outcome.
Before proceeding with any decision, consider your situation and how they relate to the existing real estate market. With a clear picture of your assets and how you can utilize them to your benefit, you can confidently make your decision.
Here are the usual considerations that may affect your decision:
Your property’s condition is one of the primary factors that will impact your final decision. For instance, if you’re leasing, the state of your property will determine how much rent you can charge. Properties that need repairs or renovations may not be too appealing to potential renters. Perhaps they assume you will put the burden on their hands, which is an expensive investment.
Meanwhile, selling property in good condition can be a lucrative choice. With a property that needs few repairs, you can expect to close the deal quickly since buyers will be delighted with what you have on offer. However, you might struggle to find a buyer if your property’s condition is bad.
Moreover, the cost of upgrades and repairs to make the property more appealing might not offer a good return on your investment. Thus, it’s crucial to assess the state of your property and how it fits into the market before making a decision.
Your goals and asking price are closely related. You must have realistic expectations when pricing your property as it can affect how quickly you sell or rent out the asset. If you’re looking for a quick sale, setting the price too high can be counterproductive.
Your target buyers may disagree with your asking price, leaving the property on the market without any offer. These properties gradually lose their value perception. Eventually, you might decide to sell at a lower price, leaving you at a loss.
Meanwhile, low rent prices can attract potential renters. However, you must confirm that you are renting to a reliable tenant. If you must set high rental prices, it will go back to how good your property condition is.
Finding a median price that best reflects your goals while meeting the demands of potential buyers or renters can ensure everyone involved leaves with what they want. Still, it will all depend on the property and the people involved in the deal.
Type of Buyer
When choosing to sell or lease, you should also consider the people who are interested in your property. For instance, if you’re selling to first-time buyers, you must be willing to negotiate the price.
Meanwhile, if you’re renting it out, your potential tenant must have a good credit score and be willing to sign a long-term lease. Consider the best option concerning your goals, property condition, and asking price.
Benefits of Selling Your Property
Las Vegas real estate sales have recently been slow. Despite this observation of realtors, the same release mentioned how 28.8% of all local property sales involved cash. Thus, you still have opportunities in the limited market to make money.
It all comes down to whether you have the right home to attract the pool of buyers who are still willing to buy Las Vegas property in today’s market. In addition, you must be in a strong position to sell your property.
Here are some great benefits of selling property that may help influence your final decision.
Earn Money Instantly
Successfully selling your property gives you money. While today’s market remains comfortable for sellers, consider taking advantage of the current situation. In addition, you can cash out your property’s equity when you sell it. You have the freedom to utilize that cash however you see fit.
For example, if you were holding on to your property believing it was a passive asset, you may want to invest in another, more passive asset. Look into bonds or stocks to confidently grow your investment instead of tying it to your house.
You may end up having an asking price that makes sense with your goals and potential buyers. As such, selling may be your best option, especially if your situation requires you to have money immediately.
Preserve Homeowner Tax Exemptions
Selling a home can be tax-free on certain conditions. Particularly, you must be selling a property that you used as a primary residence for at least two of the last five years from when you closed the sale. These two years can be non-consecutive. Moreover, you must not have sold another home within the last two years and claimed this tax exclusion.
Under the regulation, you can potentially make up to $250,000 in profit as a single filer or $500,000 as a married couple. The money you earn from the sale would be completely tax-exempt as long as you meet these requirements.
Eliminate Tenant Leasing Responsibilities
Las Vegas property management comes with liabilities that not everyone may be ready to bear. For instance, you must understand landlord and tenant information, which involves legal aspects. You must also be prepared to deal with your tenant’s requests to maintain your property or repair anything that breaks.
However, if you decide to sell your home, you can eliminate the need for tenant leasing responsibilities. You can do away with the uncertainty of securing a tenant or leaving your property vacant. In addition, you can skip finding a reliable tenant who meets your criteria.
Benefits of Renting Your Property
Home rental demands in Las Vegas are very high. Thus, you may have several reasons to hold on to your property and lease it out, provided that you maintain it well and attract the right tenants competing for the best property on the rental market.
Renting out a property that you already own may be your first venture into real estate investment. Over time, you can learn and grow until you become more experienced and build your portfolio of rental properties.
Here are some great benefits of renting property to consider.
Earn Money Monthly
When you set up a rental property, you receive money each month in the form of rent. You can even sign a year-long contract with your tenant to guarantee a steady income that lasts regardless of the ever-changing real estate market, provided you secure a good tenant.
You can use the money you make from renting a property to cover your mortgage payments or other expenses. Thus, you can potentially own a property and make money off it while avoiding the burden of a loan.
Enjoy Tax Benefits
Owning investment property gives you access to several tax benefits and deductions. As an owner, you can deduct depreciation rates for owning a property for more than one year. You can also deduct expenses such as repairs, painting jobs, landscaping, management, and advertising fees from your taxable income.
As you save money from all these tax benefits, you can easily navigate the real estate investment world and enjoy further financial stability. You may even reach a point where you only have to work a couple of hours per month managing your property and still make enough money from it.
Diversify Your Investment Portfolio
Any serious investor needs a diverse portfolio. Having a property to rent out among other investments can help you protect your assets from any significant losses. Moreover, the property is a tangible investment that does not only exist on paper like stocks and bonds.
Therefore, having a rental property in Las Vegas can help you spread out your investments and take advantage of the property market’s potential for growth. Consider keeping your property to rent it out so you have multiple investments under your name.
Final Words: Seek Professional Advice From Las Vegas Property Managers
Choosing between selling or renting your property may be one of the most challenging decisions you have to make. There are advantages and disadvantages to both options. You must weigh your options and how well each one fits your overall goals.
If you need further assistance in deciding the fate of your Las Vegas property, get in touch with our real estate experts at New West Property Management. Our team is standing by to assess your situation and compare it with the existing market circumstances to help you make an informed decision.