In this interview, Brian Spitz and Amber Carrillo, owner of Carrington Real Estate Services in Houston, discuss whether or not people should rent or sell their homes in the current real estate market in Houston.
While holding a property can make a great cash flow for an investor, some investors become tired of the responsibility. As a landlord, there are some ways you can make sure to have quality tenants.
There is still a high demand for rentals in Houston due to the low demand, so they are still a great investment. If you have equity in the home and are a tired landlord, then perhaps sellling is the best decision.
Hear what Amber and Brian have to say!
Brian: I’m Brian Spitz, president of Big State Home Buyers. Thanks for joining us and today, as our guest, we have Amber Carrillo, with Carrington Real Estate Services. And we’re going to talk about when is the right time to sell your house, and whether or not you should rent or sell it. Whether it’s in this current market or just in general. So, thanks so much for coming today.
Amber: Absolutely. Thanks for having me.
Rent home or sell it
(0:00:53.1) Brian: Absolutely. So, tell us about renting your home or selling it.
Amber: Well, when it comes to renting your home or selling it, there are just so many different factors. A lot of it is going to depend on you, on personal finances. And what works best for your situation. Are you in a situation where you need to sell your house in order to buy another one? Or are you in a situation where you’re going to be a long distance landlord. There are so many factors that go into that.
Brian: Yeah, that’s true. I mean, a lot of it, I guess, is whether or not you need the down payment and the equity of your first house or whether your mortgage lender requires that you only have one loan.
Brian: When you see people rent houses out, in my experience, at Big State Home Buyers, we buy houses directly from sellers and one of our biggest client bases is actually, a funny word, is tired landlords, people that have been landlords and want out of the business. So, what I tell people is it’s not as easy as it looks. But what is your experience? Of course, it works out really well for some people, especially if you get the right tenants.
(0:01:54.8) Getting a Property Manager if Renting
Brian: What do you see for the average person who is thinking about renting their home, rather than selling?
Amber: Well, if you do not have the experience, I would absolutely recommend that you contract that out with someone to handle the property management, because there are just so many different laws, you know, tenant rights and landlord rights, and you really need to be studying up on those types of things.
If not, have a really good real estate attorney in your corner that you can call whenever a question or situation arises. When it comes to doing evictions and stuff like that, it can get really hairy, so it’s not something that you would always want to handle hands on.
Brian: Oh, yeah, definitely not. The biggest reason people try to take that on themselves is basically to save the money you pay the property manager but my philosophy is you should pay people to do what they do best so you can do what you do best.
Amber: That’s exactly right.
Brian: Property management is a tough deal.
(0:02:44.4) Screening tenants
Amber: It is a tough deal. And it’s so important, if that’s something that you’ve chosen to do, is that you screen the applicants very well and you’ve got a system in place to screen those.
Amber: So a lot of times, if you’re going to list it with an agent to lease it out, we have those resources available to do background checks and credit screenings and stuff like that.
Amber: To be able to prevent putting felons and stuff like that in the property.
Brian: Right. And so a lot of times, people just put a For Rent sign in front of their house and they kind of take whichever tenant looks like they can pay the rent. But the reality is if you just wait for the right tenant, you end up in a much better position.
Amber: That’s right.
Brian: So, definitely, you know, and the market right now for rentals, just like for sales, is really strong. So you can hold out for the right tenant.
Amber: Right. Absolutely. There’s tons of investors in the market that are snapping up the houses and turning them, holding them for a period of five to ten and even twenty years, in some cases. And they’re renting those properties out. And there’s a high demand for rentals. There are so many people moving to Houston on a weekly basis, so, yeah, there’s a need out there. And at every turn that you make here in Houston, you see new apartment complexes going up.
Brian: Everywhere. It’s crazy.
Amber: Yeah. And occupancy rate is very high right now, so rentals, they are a great investment.
Brian: So you can hold out for a good tenant. If you’re going to rent your house, hold it out for a good tenant.
Amber: You can, but again, that just depends on if you have note on that house that you need to pay. Yeah, if you’re in a bind financially, then that’s going to effect on how long you hold out for a good tenant.
9:04:15.5) When is right time to sell
Brian: Right. Oh, I guess, that’s true, too. How do you know when it’s the right time to sell? You know, there are a lot of things about the time of year or the market. Obviously, the market, the perception is the market is very strong in Houston, which it is, but what do you tell people when they ask you, what is the right time to sell my house?
Amber: Well, you know, many people are looking to sell during the summertime. That summertime frenzy starts right in May and goes until about the end of August, beginning of September. And that’s when you run into situations where you have multiple offers and there’s just, you know, it’s not uncommon to have your house shown ten times a day. So, but that’s a time where people are moving. You know, teachers are out of school for the summer. Their kids are out of school for the summer. And so it’s just more convenient to move during that time.
Generally, though, when people are looking for a house, if they’re going to be looking for a really good deal, they know the seasons and they know to hold off. Only people who really need to sell their house are going to put their house on the market during Christmas time or during the holiday season.
Amber: So, if that’s something that you’re faced with, if it’s possible to put your house on the market during the frenzy, the buying frenzy, I would definitely recommend it. If not, you may take a hit in the price by putting it on the market during the holiday season.
Brian: What’s the cut-off point? Like, if I have a house ready, can I put it on the market November 1st? Is that too close to Thanksgiving? What is your opinion?
Amber: There are people, sometimes, there are so many people moving into Houston, a lot of relo’s are happening. So there will be people, those people come any time of the year.
Amber: And they still need to buy, just like everyone else. And because we have such a deficit of homes and listings on the market available, right now, you’re not seeing that impact as greatly as we did several years ago.
Brian: Right. So really, any time right now in Houston is a good time to sell a house.
(0:06:14.3) Homestead Exemption
Brian: One of the other things that I see is, in our business, because we’re always buying, selling, buying, selling. So we’re always closing houses and the fourth quarter of the year that, you know, November, December, October, those months can be some of our busiest months. And one of the reasons I see in the past couple of years is the Homestead Exemption. Doesn’t the Homestead Exemption cut off at the end of the year? You have to file for it by December 31st, don’t you, for the following year?
Amber: You have to live in that house by December 31st.
Brian: Live in it.
Amber: Yes, of that year, in order to file it for January.
Brian: So, there’s often a push to get closings done in the last weeks of the year so that you can get that Homestead Exemption.
Amber: There is. And if you work with investors, like a lot of us do, then you’ll find a big push, you know, people are needing to make wise investments before the end of the year for tax purposes. So we usually, November, December, are some of our busiest months.
Brian: Yeah, they are. Well, what else can you tell us about when to sell your house?
Amber: Well, let’s see.
Brian: Or when you need to sell it.
Amber: Or sell it when you need to sell it. Exactly right. As far as seasons go, gosh (laughter). I’m drawing a blank.
Brian: Well, that’s a really good start. So if you want to rent your house, you can contact a good real estate agent, like yourself, and how can we reach you at?
Brian: Okay, so CarringtonRealEstateServices.com. If you want to sell your house fast and you don’t want to list it and you don’t want to fix it, or if you’re a landlord that’s tired of being a landlord, you can contact us at BigStateHomeBuyers.com. But for the person that wants to rent their house out, and I agree, get yourself a good agent. Make sure you screen the tenants. Hold out, if you can, for the good tenant that’s stable with a job they’ve had for a while and good rent history. And if you want to sell it, even though the seasons, the old thing is sell in the summer, hold in winter. If you’re in Houston and you want to sell your house, it looks like any time is the time to do it.
Amber: Any time is a good time.
Brian: Great. So again, I’m Brian Spitz with Big State Home Buyers and we are here with Amber Carrillo with Carrington Real Estate Services and thank you very much for joining us.
Amber: You got it.
Brian: Great. Thank you.