A PCS, or permanent change of station, is the norm for members of the Coast Guard and their families. Coast Guard members play multiple important roles to protect our country and our environment and you must go where you are needed. SeaWest recognizes the many sacrifices you make to serve the public.
While you may think a PCS move is selling your current property and moving to another, a current trend is turning your current property into a rental property. This can bring in additional income and business experience. But it’s not for everyone as many considerations and decisions need to be made.
So, how do you know if managing a rental property is in your future? Let SeaWest help steer your ship in the right direction.
To Rent or Not to Rent
That is indeed the question! This is the first decision you have to make – and the most important one. While renting out your home can help with your expenses, it also comes with more responsibility. There are pros and cons to every decision!
When you rent out your current property, you are establishing an additional source of income. Real estate is a popular form of wealth building and renting out one home can break you into the world of real estate investing.
Plus, renting a property does not just bring in additional funds. It gives time for your investment to grow and your equity in the home to build.
Of course, the positives are negated by one bad renter. While we all like to think we are good judges of character – especially members of the military – we are not immune to being tricked. This is why it is critical to vet potential renters.
One bad renter can sour the deal. Missed payments, damage to property, eviction. These are all things you may have to deal with if the renter is not ideal. Make sure to do proper credit checks and review any rental history.
How to Decide if You Should Sell or Manage Your Own Rental Property as an Investment
There are definite “signs” that will point you in one direction or the other. Here are some signs that you should rent – and some signs that you should sell.
Rent: Demand Is High
Research the area of your current property. Is there a high demand for rental properties? If you are in a sought-after neighborhood, near schools and stores, or in a growing community with job opportunities, chances are that someone would rent your home.
Amenities also make a difference. Most renters are looking for attractive outdoor spaces, plenty of parking, and walkability. Fixtures and appliances in the home also appeal to renters.
Rent: Guaranteed Profit
While nothing is truly guaranteed, crunch those numbers to see if renting will bring in enough money to make it worthwhile. Compare the rental income to the income you will get from selling your home.
Sell: Seller’s Market
The housing market has been a whirlwind lately. If houses are selling over asking or there is high demand in your area, selling may bring in the most profit. Again, it comes down to crunching those numbers.
Sell: Not Enough Cash Flow
While renting out a property can be a good source of cash, if you can’t rent at a level where you would make a profit, it may not be the right decision. Plus, by renting out your property, you are taking on a new role: landlord. That may not be a part you want to play!
DIY or Property Manager
If you don’t want to be a landlord, there is a solution. Property managers or property management companies can be the helping hand you need.
Hiring a property manager takes out the guesswork of renting a property. You will be avoiding time-consuming tasks and you won’t be left on your own to figure out the maintenance. Management companies usually have maintenance staff and preferred contractors that they have thoroughly reviewed and worked with in the past.
Likewise, property management companies usually have an extensive screening process to determine the best tenants for your property. This will help you avoid a “bad renter” situation.
Of course, if you DIY, you won’t be responsible for paying a management company. Fees for property management can range from 6 to 12%. Note that there is landlord software out there for those who don’t want to hire a property management company but need a little help staying organized.
Make Your Property Rental-Ready With Help From SeaWest
If you’ve done your research and crunched your numbers, you may be thinking renting out your property is a step in the right direction. How can you make sure the property is ready to rent?
Luckily, you can use the equity you have in your home to gain access to funds to make any repairs or upgrades before putting the place out for rent. A home equity line or home equity line of credit (HELOC) with SeaWest can help you give your potential rental property a facelift!
SeaWest offers home equity loans at a fixed, low-interest rate. And our HELOCs allow you access to extra funds from which you can draw. With a HELOC, you won’t pay interest on anything you don’t withdraw.
Let SeaWest put a little extra wind in your sails. As the only credit union for members of the Coast Guard and their families, we know your unique needs and special circumstances. We are here to help before, during, and after a PCS move. We are here for you!
Learn more about our home equity loans and HELOCs today!
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