Do you have a Bradenton property, and you’re not sure what to do with it?
Maybe you’ve inherited a home or you’re selling the home you currently live in to move somewhere else. Perhaps you’re moving out of the area, but only temporarily, and you’re not sure if you should sell the home when there’s a possibility you’ll need it again one day.
Perhaps you’re thinking about retirement, and even if you don’t need the house you have right now, it might be an ideal retirement home in 10, 20, or even 50 years.
When you’re not sure what to do with your Bradenton property, you should first look at it as an opportunity.
Renting out the property is a great idea for a number of reasons. There’s the rental income of course, but also the idea that your property will increase in value, making more money for you in the long term – even while tenants pay down any mortgage that remains.
You’ll also enjoy tax benefits and if you really find yourself enamored with the idea of investing in real estate, you can leverage this property later to buy another investment and increase the size of your portfolio.
As Bradenton property managers and real estate experts, we always advise homeowners to rent out their homes if they have a property that they have no intention of living in.
Selling is easy and it will make you some quick cash. Renting the home out, however, delivers more money over the long term.
Here are some of the reasons renting out your Bradenton property makes the most sense.
You Have Long-Term Options and Short-Term Vacation Options
One of the best reasons to rent out your property in Bradenton is that our market is pretty unique. With a central Florida location that’s minutes from the Gulf of Mexico, you can use your property as a vacation rental or as a rental home that you’ll lease to long-term tenants.
When it’s a vacation home, you can charge high nightly rental rates. When it’s rented out with a long-term lease, you can expect stable, reliable tenants who will help you maintain the property.
Choosing a path will depend on your own situation and your tolerance for risk and for frequent turnovers. Some reasons to make your property a short term rental would include:
- Higher per-night rates
- You can use the property yourself when it’s not rented out
- You’ll have a large pool of potential guests and visitors due to the popularity of Bradenton as a vacation destination
There are benefits to long-term rentals too, such as:
- Stable income for a year or longer
- Less turnover and vacancy risk
- You don’t need to worry about furnishings or utility costs
Talk to a property manager about how your property would best be positioned on both markets. Homes close to the beach will obviously do well as vacation rentals. If your home is in a gated, new construction HOA neighborhood, a long-term rental might be more appropriate.
Holding onto an Asset Makes Financial Sense
It’s tempting to sell a home you’re not living in. This is a wildly lucrative market for sellers, and you can likely get a high asking price for your property.
But, if you hold your asset and rent it out for a few years or even longer, you’ll find that you ultimately earn more on that property.
This is a great opportunity to keep a tangible and valuable asset in your financial portfolio. It’s also a great opportunity to begin thinking about yourself as a real estate investor.
When you hold onto the home, you will create some leverage for yourself if you want to access equity, buy an additional rental property, or rent the home out for a while and then exchange it for another property using a 1031 exchange.
By keeping this home as a rental, you’ll remain active in a growing and competitive Bradenton real estate market. You’ll have a valuable asset that’s appreciating over time while your tenants pay down your mortgage with their rental payments. Those rents will also contribute to expenses like property taxes and insurance.
Renting Out Your Bradenton Property Earns Consistent Rental Income
Good tenants are looking for good homes. The rental market in Bradenton is just as competitive as the sales market. There are a lot of tenants looking to rent a well-maintained property in a great location. If you happen to have one of those, you’ll attract a large pool of qualified tenants, and you’ll be able to set your rental price pretty high.
Inflation and demand has sent rents higher and higher all over the country, and especially in Florida. We have a lot of newcomers moving into the state. Our population is growing because people enjoy the warm weather here, the proximity to beaches and forests and shopping and recreation, and the generally low cost of living compared to northern states. We don’t have a state income tax, and with the remote working trend seemingly here to stay, workers who can live anywhere are choosing, in large numbers, to live in Florida.
The tenant pool is growing because of the population growth and also because of the hot sales market. Many tenants who would have imagined they were going to buy a home this year or last year are finding that they’re priced out of the market. There’s also not a lot of inventory, so they’re choosing to rent for a while longer, giving you the opportunity to attract them to your rental home.
Renting Out a Bradenton Property Allows for Tax Benefits
Maybe you’re thinking you might sell your property. There are plenty of great reasons to do that, but prepare yourself for the taxes you’ll have to pay.
Why not save on taxes instead? You can reduce your tax exposure by renting out a home.
You can expect to pay a capital gains tax when you sell your home. Property values have increased and you’re likely earning a lot of money on any sale. But, when you rent that property out to tenants, you’ll avoid a lot of the tax exposure you’d otherwise face.
We aren’t accountants or CPAs, so check with your favorite financial professional before you take advantage of any deductions or write-offs. But, in general, you can expect to take advantage of some tax benefits such as:
- Deducting for the depreciation that occurs with a rental property. The amount you can deduct is based on a lifetime number of 27.5 years for your home (not the land), which is pretty generous by IRS standards.
- You can deduct any expenses associated with maintaining the home. When you have to fix something or pay for a major repair, those costs are deductible, leaving the maintenance bills a little less painful.
- Deductions also apply to professional services like accounting experts, legal fees, or property management costs.
- You can deduct the interest on your mortgage.
- You can write off any travel expenses when you need to visit the property.
These tax benefits do a great job of reducing what you have to pay at tax time. Keep careful records so you can document everything that you spend and earn on your Bradenton rental home. When it’s time to file, you’ll need to include a 1099 Form.
Don’t Worry About Being a Landlord. There’s Bradenton Property Management
We know that a lot of homeowners choose not to rent out their properties because they’re worried about the requirements of being a landlord.
It’s not for everyone.
When you rent out a home, you need to spend a lot of time and resources educating yourself on landlord and tenant laws. You need to put in the effort of marketing your property and finding a tenant. You need to protect yourself and your investment by screening tenants properly, inspecting the home from time to time, and keeping it well-maintained. No one wants to get a phone call in the middle of the night about a leaking water heater.
If you do decide to rent out your Bradenton home, you don’t have to worry about those day-to-day landlord tasks. You can hire a property manager.
Bradenton property managers can help you effectively lease, manage, and maintain your rental property. You won’t have to struggle with how to return a security deposit or where to find an HVAC expert when the air conditioning goes out in the middle of a hot Florida summer.
There’s no need to worry about marketing and showing your home, finding a tenant, collecting rent, making sure the home is well-maintained, or dealing with legal complexities and liability. Property managers do this every day for owners just like you. When you decide to rent out your property, contact a Bradenton property manager right away. You’ll need to know how much rent you can expect to earn and what you may need to do to prepare the property for the rental market.
We’re here to help! Contact us at Anchor Down Real Estate & Rentals, and we’ll help you get started.
