Should I sell or should I rent?

With large inventories of homes for sale, buyers seemingly have the upper hand.  Though there has been some good news lately in many markets throughout the country, such as rise in existing home sales, it has been balanced by record declines in median sales values, some areas ore than others.

This mixed news can make it tough for homeowners when they have to make a choice between selling a home and renting it out. There are quite a few questions you can ask yourself when making this choice.

The most basic question is: Will my income exceed my expenses?

This question can be much more complicated than it first appears, due to the following questions it raises in turn:

• Do you have time and are you able and willing to manage a rental property, or should you hire a rental management company?
• Are you aware of the tax implications that renting your home can have for you?
• Can you ensure your rental property will have 100% occupancy?
• What are expected repair and maintenance costs? Most experts believe you should set aside anywhere from 20 to 30 percent of the rent in reserve for such items.

If you have done the research and uncovered all the pitfalls, there are many advantages to being a landlord. You could potentially make a profit on your rental home while building equity at the expense of the renter. Waiting for prices to start to swing upwards in this market may be the single best source of equity gain you can have over the next several years.

Whatever you decide, make sure you take full advantage of resources and get feedback from multiple rental management companies and real estate agents. They will know best about either side (rental and sales) of the real estate market and help you make an informed and advantageous decision. As always — take full advantage of the internet and sites like eppraisal.com to help track local market conditions.

And BERYL SEZ:  Be cautious now more than ever about waiting to long to buy, while you wait for prices to dip $5-10,000, the interest rates could go up a point (1%) overnight, and then you'll find yourself having to make higher payments on a home that you hope will cost you less!  (psssst - this scenario has already happened to clients who refused to heed my warning)

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