5 Things to Think About Before Renting Out Your Santa Cruz Real Estate

Posted by Lauren Spencer on Sunday, September 13th, 2009 at 7:27am.

If you have a piece of Santa Cruz real estate and you’re trying to figure out whether to sell it or rent it, here are a few things to think about before doing either:

1.  How much rent can you charge?  Your rent will need to cover the costs, including mortgage, taxes and insurance.  In addition, you’ll need liability insurance, as well as an additional 5 to 10 percent for unexpected maintenance.  If your area’s typical rent amounts won’t cover your costs, you probably don’t want to rent.

2.  Do you have other ways to cover a down payment?  If you’re moving to another piece of property, but relying on the equity in your current Santa Cruz real estate for the down payment, you don’t want to rent.

3.  Do you have the time?  Becoming a landlord means extra responsibility.  Although it may not take a lot of time, that time can be inconvenient, especially if you have a full time job.  If you can’t picture yourself getting up at odd hours of the night to meet a plumber, you probably don’t want to rent.

4.  Can you afford to give up a tax break?  The capital-gains tax exemption is one of the benefits of owning a home.  If you keep the property for five years and live in it for two, you won’t have to pay taxes on the first $250,000.  However, if you rent for more than three years before selling, you’ll owe capital-gains taxes on all of the profit.  If you can’t afford to give up the tax break, you probably don’t want to rent.

5.  Can you handle wear and tear?  Not every renter will be careful with your beautiful French windows and teardrop chandeliers.  In addition, if your property has a lot of rooms it will probably attract families with kids.  If you can’t handle the wear and tear from different renters, you probably don’t want to rent.

Renting out Santa Cruz real estate isn’t for everyone.  However, if you’re trying to sell your property and having problems finding a buyer, it is something to consider. 

If you're trying to decide if you want to sell your home or rent it, I can help.  Call me today at 831.662.6522 or contact me at lauren@laurenspencer.com for more information.



Typical rent amounts

becoming a landlord

capital-gains taxes


About Lauren Spencer

Award-Winning Santa Cruz REALTOR®

Lauren Spencer is your local real estate expert, specializing in Santa Cruz real estate and surrounding communities—this is where she lives, works, and plays too. Let her know your questions about the community and county and she'll be happy to fill you in on all you want to know! Lauren Spencer has consistently been voted best local REALTOR in Santa Cruz and is always happy to offer her advice and expertise. Call her at: 800.226.4717.

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