The Irvine rental market is pretty strong right now. There’s a higher demand for good rental housing than there is supply, which means property owners are able to charge higher rents and be more selective when it comes to choosing tenants. It’s an excellent time to be renting out a well-maintained home in a desirable neighborhood.
However, the sales market isn’t doing so badly, either. Home prices in July were up an average of 19 percent compared to last year. Generally, homes are selling within a month of being listed on the market.
If you have an Irvine home that you no longer plan to live in, this leaves you with a big decision: should you sell that home or rent it out?
The answer will depend on your own financial plans and what you may or may not want to do with that property in the next year, five years, or 10 years.
Reasons to Sell Your Irvine Home
When the sales market is as strong as it is now, and home values are trending up, selling can be an attractive option because you’ll earn money and walk away from the responsibilities that come with owning an Orange County rental property that you no longer want to maintain. If you’re planning to leave Irvine, for example, with no intention of coming back, you might be drawn to selling so you don’t have to think about the property again.
If you have a lot of equity in your property and you need to get your hands on some cash, selling is probably going to be your best option, especially in this market with high prices and still relatively low interest rates for buyers. You might also need some money for a down payment on a new home or to send a child to college. Explore your own financial needs when making this decision.
Reasons to Rent: Consistent Rental Income and Growing Value
If you don’t need the cash right now, you may find it’s financially better to hold onto your property. Remember that the Irvine real estate market can be expensive, and since you already own an investment property in California, why not keep it? This will provide you with long-term appreciation and ROI.
There are additional financial benefits to renting out your property. You’ll earn a reliable rental income every month and selling in five years or 10 years may deliver a larger payoff than what you’d earn by selling now.
The Irvine rental market is fairly stable. There’s always going to be a demand and a great pool of tenants who are well-qualified. In general, you won’t have to worry about expensive vacancies or frequent turnovers. Rental prices are also rising, and when you can attract and retain great tenants, they will help you pay off your mortgage while your asset value continues to rise.
Consider Tax Benefits for Irvine Rental Homes
There are also taxes to consider. When you sell, you can expect to pay capital gains taxes. However when you have a rental property, there are a number of tax deductions you can enjoy. These include write-offs for maintenance and depreciation as well as professional services like accounting and property management. You can also deduct your mortgage interest.
As you probably know, renting out a home in Irvine can be complicated, especially with all the new state laws in place. You’ll have a better and more profitable rental experience if you work with an Irvine property management company.
We can help you decide whether selling or renting the home out is your best option. Please contact us at HCM Property Management.