Our resources over at the Cromford Report recently released some surprising stats on the rental marketplace. Rental listings are becoming scarce and the number of rental listings in the ARMLS now as compared to this time last year has dropped 13%. What’s more, that 2015 number had dropped 13% from 2014, which had also dropped 17% as compared to 2013. That’s a decidedly clear trend that equals about a 37% downfall in rentals since 2013.
So what does that have to do with your AZ golf home? Well in some cases, it may be more beneficial to rent your home than to sell it. A higher rental demand with low inventory means you may be able to get a premium rate for your home over the course of many years. Since this is not a solution for every home owner; let’s go over the pros and cons of jumping from home owner to landlord.
Rents are rising
According to rentjungle.com, the average monthly rental rate for one and two bedroom homes in Scottsdale is $1,228. They have also compared this average with the average of each month since 2009. Rates have steadily increased over the last seven years, right in line with the decrease in inventory. Some neighborhoods have even higher averages and rent increases, particularly the Pinnacle Peak area, and three and four bedroom homes pull in even higher rents above $2,000 per month.
Look at short term versus long term
You really only want to rent your home if you will break even at the very least on the mortgage, taxes and fees (fees such as home owner’s association dues and anything you’re not passing on to the renter). If the market is not in the best place for you to sell or you owe more on your mortgage than you would gain from the sale of the AZ golf home, renting is a definite short term option.
Then, if you scored a great deal on your home and your mortgage is quite low, you could stand to make a profit on the rent you charge. Real estate is one proven way to build wealth (when handled properly), so this is great for both long and short terms. In the short term it gets you a little extra income, possibly more to spend on a Scottsdale golf home upgrade. In the long term this can be a major financial investment, building more equity in the property, paying you dividends and contributing to long term financial goals like retirement.
Your AZ golf home is in your hands
Becoming a landlord may sound like a big step and a lot of responsibility. It is. However, becoming a landlord of a home that you actually lived in makes it an easier transition. You know the home’s quirks, how well it was maintained, when the appliances were last replaced or how old the air conditioner is. When considering your potential rental income as compared to the monthly cost of owning your home (mortgage, taxes, fees), be sure to account for and include costs for repairs, carpet cleanings and other pop-up expenses.
This is just our first look at the rent versus sell question. In our next installment we’ll consider the tax benefits, and the headaches, that can come with renting out your AZ golf home.
For more information specific to your home, to learn the value of your home, or to find out what your home could potentially rent for, contact The Matheson Team. We’re well-versed in the world of Scottsdale golf homes and Arizona golf course communities.
Realtor | Founder
The Matheson Team – RE/MAX Fine Properties
21000 N. Pima Rd., #100, Scottsdale, AZ 85255
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