In Charleston, the sales market can often be a lot less predictable than the rental market. If you’re struggling to sell your home right now due to market saturation or because you’re in the military and getting new deployment orders, you might be wondering if it’s better to rent your property instead of selling it.
This can be an attractive option, especially if you are only leaving Charleston temporarily and you plan to come back. It’s also a good way to earn some cash flow in the short-term while a tenant pays down your mortgage and your property value increases.
The ultimate decision will depend on your specific financial needs and your long-term goals. When owners ask us whether it’s better to sell or rent out their Charleston home, we ask them to consider a few important factors.
Evaluate the Charleston Real Estate Market
In a market that’s favorable to sellers, when you can get the asking price you want, selling is an excellent opportunity to access your equity and walk away with an impressive profit. However, market conditions have to be what you need in order for selling to make sense. In a market where the supply outpaces the demand, you could be looking at a lower sales price and an increased number of days on market. There’s a lot of inventory and new construction homes continue to gain interest from developers and homebuyers.
Competition is high for sellers right now. Before you decide that you want to sell your home, make sure you can handle the risk and the competition.
Renting Instead of Selling: Benefits for Charleston Property Owners
If you aren’t thrilled with the state of the sales market and you don’t need the cash, we always recommend owners consider holding onto their properties. The asset will always increase in value, and renting out a home provides an opportunity to earn more money from it. This delivers a larger profit when you do sell in a year or two years or five or 10.
You’ll also have consistent rental payments coming in every month, which will help you cover the expenses of your investment. Depending on the rent you earn, the entire mortgage payment could be covered.
The Charleston rental market is stable. The population is growing and there’s a good population of well-qualified tenants who are looking for long term rental homes. We also have a steady demand for short-term accommodations thanks to the tourists and vacationers who arrive looking for a place to stay while they’re visiting Charleston.
Rental prices are stable, and when you can attract and retain great tenants, they will help you pay off your mortgage while your property’s value continues to rise.
Consider Tax Implications of Selling and Renting
There may be a capital gains tax on the sale of your home, whereas with rental property, you’re able to take a lot of deductions. You can deduct the home’s depreciation, which is pretty generous by IRS standards, and you can also deduct any expenses associated with the home, such as maintenance and professional services like accounting, legal fees, or property management. These write-offs help to reduce your overall tax liability.
Work Closely with Charleston Property Managers
Selling is better for you if you’re emotionally attached to your property and you don’t think you’ll be able to treat it like a business. You have to be willing to separate yourself from it when tenants are paying rent to live there.
If you want to rent out the property and you’re out of the local area, your best chance at success is to hire a professional Charleston property management company. This makes sense for you when you decide to rent instead of sell.
We have a lot of experience working with military homeowners who are renting out their property as well as owners who don’t want to give up their asset but also don’t want to lease, manage, and maintain the property while it’s being rented. We can help. Contact us at Meridian Residential Group.
Meridian Residential Group in North Charleston provides both single-family and multi-family property management in the Charleston, SC area, including in North Charleston, Summerville, Goose Creek, and Moncks Corner, among other cities.