Two San Diego Real Estate Decisions That Could Affect Your Equity
Two San Diego Real Estate Decisions That Could Affect Your Equity
Should you keep renting out your home, and what should you check before buying a San Diego condo?
1. Should You Keep Renting Out Your Home or Sell It?
A rental property may bring in monthly income, but gross rent is not the same as profit.
Before deciding to keep the property, compare your true rental income with the amount of equity tied up in the home.
Before deciding to continue as a landlord, compare:
- Your net rental income after HOA fees, taxes, insurance, repairs, vacancies and property management
- The amount of equity currently tied up in the property
- Your actual annual return on that equity
- Your estimated proceeds if you sell
- What you could earn or accomplish by reinvesting the money
- Whether a possible 1031 tax-deferred exchange could improve your return
Selling is not always the correct answer. Keeping the property is not always the correct answer either.
The better question is whether your equity is producing a strong enough return to justify the costs, risks and responsibilities of being a landlord.
You may be better off selling, completing a possible 1031 exchange into a newer or higher-return property, paying down debt or using the equity for another investment.
Get a Free Rent-versus-Sell Comparison
Compare your estimated rent, expenses, home value, equity and possible selling proceeds before making a decision.
2. Buying a San Diego Condo? Check This First
A condo may look affordable until you examine the homeowners association.
Before buying, look beyond the purchase price and monthly HOA payment. The financial condition of the association can affect your monthly cost, financing options and future resale value.
Before buying a condo, review:
- The HOA’s financial reserves
- Building and master insurance coverage
- Upcoming repairs and deferred maintenance
- Current or possible special assessments
- Pending litigation
- Owner-occupancy and rental restrictions
- Whether the condo qualifies for common loan programs
A lower-priced condo is not necessarily a better deal if the HOA has serious financial, insurance or building problems.
Considering Buying, Selling or Keeping a Rental Property?
I can help you compare your estimated rent, expenses, current home value, HOA information, potential cash offer and likely selling proceeds.