selling vs rental property

[Deonna Franz]

Hello BP network! I am fairly new to this forum, so bear with me :)   I am a Realtor, and I have a client who bought their 5 bed, 2 bath house only a year ago here in Colorado Springs for $275K. They are now looking to sell their property, but they obviously have not been in the house long enough to make much money back (they put $55K down on the house) even with how hot our market has been. The rental market is pretty good here right now, so I was wondering if anyone has knowledge of a useful tool they've used, or currently use, to analyze whether it would be beneficial for them to rent out the property versus just selling it and losing out on potential income?

Thanks in advance!

[Ryan Riches]

I would definitely recommend using a tool like rentometer in conjunction with the calculators that BP provides. The biggest thing is that you want to be sure to calculate things like maintenance and repairs, cap-ex, and vacancies into the equation. Looking at it just based on what they can get for rent vs. what their mortgage payment is could put them in a tight spot - thinking that the property is going to cash flow because they are not seeing the whole expense picture is what you want to avoid.

A great way they could bolster their cash flow if they wanted to keep it could be running it as a Short Term Rental. My wife and I manage several around the city and depending on the area of town they can provide a great ROI, especially in the summer.