Should You Sell Or Rent Your Kamloops Home?
Many home owners today in Kamloops are wondering whether they should sell or rent. Homes are on the market for a longer period of time. More homes listings are expiring and many homeowners are getting frustrated with the recent decline in Kamloops real estate prices. I have heard numerous times in the past few months “I am going to rent my home for a year and sell it at a later time”. This plan works in theory, but when you dig deeper the rate of return on capital makes keeping the property a poor investment depending on the numbers.
Capitalization rate is a measure of the ratio between the net operating income produced by an asset (real estate) and its capital cost (the original price paid to buy that real estate) or alternatively its current market value. I have found a capitalization rate calculator that indicates “Rent” or “Sell” once you input the numbers for your property. This calculator makes the decision very straight forward. Unless you are receiving around a 5.7% rate of return, holding on to a property and renting it is not beneficial to you according to this calculation.
Click here to try the Rent or Sell calculator.