Are You Happy? 🤨
Don’t overthink it. Vocalize the first answer that pops into your head.
Are you happy with your rental income as your 2023 rental season comes to an end?
If you said no, let’s check out your options going forward. You may be able to unlock higher returns by upsizing.
Consider the equity power in your current home
Chances are if you purchased your home prior to 2022, you likely have equity in your home.
Ask an experienced agent (that's me!) what your current market value is. From there:
Deduct your current mortgage
Deduct your closing costs (approximately 8%) including real estate taxes
Depending on your situation, you likely have purchasing power for a new home.
Understand the current resale market
Even through uncertain economic conditions, the Outer Banks resale market is proving itself resilient. Year to date, 71% of homes have been financed at the current mortgage rate. Demand is outpacing supply and prices are holding strong. Government-backed mortgages are backed by the federal government, which means they have lower down payment requirements and more lenient credit score requirements than conventional mortgages. This makes them a good option for people with less-than-perfect credit.
For the sake of accuracy, we'll use Kitty Hawk as an example (YTD):
Average List Price: $777,883
Average Home Sale Price: $750,659
Total Inventory: 44
*Source Outer Banks MLS
Understand the current rental market
Compare your resale value with the rental market. 67% of Kitty Hawk’s real estate is taken up by renters. The asking price for rent in Kitty Hawk is rising – especially for well-maintained properties in great locations.
Average Single-Family Daily Rent in Kitty Hawk: $414.5
Available Rentals in Kitty Hawk: 1,600
Average Occupancy Rate in Kitty Hawk: 67%
Weigh your options
If you were to sell your home.....
Your estimated net proceeds would be:
Current Market Value - Mortgage - Closing Costs = Net Proceeds
If you were to keep your home and rent it out.....
Your income potential would be:
Annual Rent Payment - Annual Mortgage Payments - Annual Expenses = Income Potential
Consider Upsizing: Elevate Your Investment!
It's a great time to take advantage of 1031 exchanges! Rolling your funds into a higher-producing property gives you more purchasing power.
Upsizing to a more profitable rental property can significantly amplify your income, allowing you to leverage the flourishing market conditions in our locale. If your current rental is falling short of maximizing your returns, we are here to assist you in navigating the market to find a property that aligns perfectly with your investment aspirations. Upsizing doesn't always mean a higher price, it can be a different bedroom count, better location, or more amenities: all things that trigger higher rental income.
Don't let underperforming assets hinder your financial growth. Reach out to us today to discover the optimal investment opportunities waiting for you in the Outer Banks.