Here’s why selling your Boston condo today may not be such a smart bet.
If you’ve been contemplating selling your home, you may have heard that now’s a great time to do so. A limited amount of housing inventory and low mortgage rates have combined to create a scenario that’s definitely a seller’s market. And if you list your home now, you may not only get a quick offer, but an offer at a price you’re quite happy with.
But while it may seem like a great time to sell your Boston condo, you may want to hold off for one key reason.
The glaring lack of inventory that’s plagued the housing market all year goes both ways. While low inventory gives you an advantage as a seller since you’ll have less competition, it also means you might struggle to find a home to move into when yours sells.
Of course, if you’re going from selling a home to renting one, that isn’t an issue. While rent prices have risen across the country, there seems to be a reasonable amount of rental inventory. But just as many buyers today are struggling to find homes, so too might you have a hard time finding a new home that meets your needs and fits your price range.
Keep in mind as well that you may not want to compromise on any of the details of your next home. Say you’re selling because you want a certain number of bedrooms, or you’re set on having a finished basement. As much as you may not want to compromise on those things, you might also struggle to find a home in your price range that checks those boxes.
There may be specific circumstances driving you to sell. If, for example, you’re just plain out of space in your current home and living there is a struggle given your family size, you may want to sell immediately. Similarly, if you’re stuck in a career rut and need to relocate for better job opportunities, you may want to list your home sooner rather than later.
Chances are, interest rates won’t stay put at multi-decade lows for much longer. That’s why taking action today is crucial, whether you’re wanting to refinance and cut your mortgage payment or you’re ready to pull the trigger on a new home purchase.
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A recent study has concluded that 39% of buyers prefer to rent out their last residence rather than sell it when purchasing their next home.
The study cites that many Boston condo owners were able to refinance and “locked in a very low mortgage rate in recent years. That low rate, combined with a strong rental market, means they can charge more in rent than they pay in mortgage each month… so they are going for it.”
This logic makes sense in some cases. Boston condo market is a great investment right now.
However, if you have no desire to actually become an educated investor in this sector, you may be headed for more trouble than you were looking for. Are you ready to be a landlord?
Before renting your Boston condominium, you should answer the following questions to make sure this is the right course of action for you.
Questions to ask before renting your Boston condo:
- How will you respond if your tenant says they can’t afford to pay the rent this month because of more pressing obligations? (This happens most often after holiday seasonand the credit card bills come in)
- Have you interviewed experienced Boston eviction attorneys in case a challenge does arise?
- Have you talked to your insurance company about a possible increase in premiums as liability is greater in a non-owner occupied condo?
- Will you allow pets? Cats? Dogs? How big a dog?
- How will you actually collect the rent? By mail? In person?
- Repairs are part of being a landlord. Who will take tenant calls when necessary repairs come up?
- Do you have a list of craftspeople readily available to handle these repairs?
- How often will you do a physical inspection of the property?
- Will you alert your current neighbors that you are renting the house?
- Does your building condo assocation allow renters? Do they allow short-term rentals?
Don’t get me wrong, renting out your Boston condo historically is a great investment. However, it is not without its challenges. Make sure you have decided to rent the condominium because you want to be an investor, not because you are hoping to get a few extra dollars by postponing a sale.
If you’re thinking of renting or selling your Boston condo contact Ford Realty at 617-720-5454.