Sell or Rent Out Your Existing Home in the Hot Colorado Real Estate Market?Posted on May 19, 2017
If you want to relocate to another state or move to a different home in your same community, it doesn’t automatically mean putting up a for sale sign. As a Realtor helps you hunt for a new home, weigh the benefits of selling your previous home or renting it out. Some people keep their home because they want the tax deductions associated with investment properties. The renter’s market in Colorado is strong. According to an article by The Washington Post, a person’s time lines help solve the riddle of whether to sell or rent.
Getting your home rented out fast
If you can’t rent your home out quickly, it could cost you money. Review your finances to determine whether you need the equity in your current home in order to buy the next house. In some cases, it’s more desirable to have the passive income generated by a Colorado rental property. Talk to an experienced Realtor about a time estimate for how quickly your home could sell vs. how soon you could find a qualified renter.
Looking at your future tax bills
If you sell your home where you resided for at least two years, you will not have to pay any capital gains taxes on the sale. However, if you turn you Colorado residence into a rental property, you will owe capital gain taxes when it’s time to sell. On the other hand, some people fall into the “sweet spot” for income levels that qualify them to claim up to $25,000 in rental losses out of their earned income. If you earn less than $150,000 a year, talk to a tax adviser about whether owning a rental property would help you reduce tax liability.
Of course, some of the advantages to renting out a home disappear if you simply don’t like the stress and hassle of dealing with the unknown, managing a property or working with a property management company. If you have bad associations with the home or the house represents your divorce or a death, consider making a clean break by selling it. With the summer real estate market in Colorado shaping up so well, it’s a great time to consider
At Team Lassen, we specialize in the lovely Castle Rock and Westminster areas. For more tips on selling or renting out your home before buying a new one, contact us. We share the latest news and updates concerning the Colorado real estate market.