By Sophie Ragsdale, June 27, 2022
Recently a client gave me the good news that he’s moving in with his girlfriend. His home, purchased in 2014, was on the small side but so livable and on an oversized East Side lot. He wondered, should he sell the home or retain and rent it out? Let’s break down his options into pros and cons.
SELL
Market inventory remains historically tight and demand is likewise high. The broker sales pitch is not simply a pitch, it is in fact true: Now is an excellent time to sell in Portland, even with the higher interest rates.
Pros: He has equity to put toward his next home purchase and/or liquid assets to assist in the next life phase.
Cons: He will no longer be the owner of the cute home that he loves so much.
RETAIN / RENT
Retaining in order to rent is a great option, depending on his monthly cash flow and the cost of home upkeep. Before taking this route, it’s good to determine the profitability of the rental over time, estimate his potential monthly and yearly cash flow, as well as plan for unforeseen expenses. One resource for making this determination is using a Rental Property Calculator. See HERE
Let’s say, my client runs all the numbers and determines that his home will make an excellent rental property, retaining and renting the home will allow him to bring in passive monthly income while continuing to build equity on the home. Moreover, due to Multnomah County’s Residential Infill Project (RIP), retaining the home safeguards the option to build out his lot into up to 4 units. The potential pros of this option are many and the cons are too.
Pro: Retain equity in the home for continued asset appreciation and rent out for passive monthly income. Opportunity to build up to 4 rentable units.
Cons: The life of a landlord is very specific, especially in Multnomah County, which has complicated landlord/tenant laws.
Encourage to-do: Learn the ever-evolving Multnomah County landlord/tenant laws. My client should consider his capacity to tolerate the landlord/tenant interaction. Does he have the time, money, and emotional space should something go wrong? It’s also possible to hire a property management company.
Sophie Ragsdale
Broker | Earth Advantage | ADU Specialist | OR
She/Her
Sophie delivers thoughtful strategy and a deep knowledge of the Portland Metropolitan market.
If you are a first-time homebuyer, Sophie will be there every step of the way, educating you on the home buying process and, most importantly, crafting you a winning offer. If home buying and selling is old hat, she is an excellent collaborator, intrepid seeker of creative solutions, replete with information and resources, and constant calm in a given storm. Sophie uses both intuition and intelligence to skillfully negotiate any transaction to an effective end. She gets her clients what they need.
Born and raised in Portland, Sophie is a 5th generation Oregonian with a lifelong passion for real estate. She loves the unique challenge of every transaction and the relationships she makes along the way. After graduating from Vassar College in NY State, she found herself enjoying the hustle of life in Brooklyn where she lived and worked for over a decade.
In addition to real estate, Sophie has worked in journalism and as a social worker, specializing in assisting older adults in housing crisis.
Sophie’s experience in person-centered services prepared her to provide clients with a grounded space during the potentially wild ride of home buying and selling. She supports her clients in seeing the big picture while staying focused on the task at hand. Her ability to think creatively gives her an advantage, whether it be problem-solving during the negotiation process or marketing a property for sale. But she's no pushover. Her two years in Brooklyn and Manhattan real estate at the Corcoran Group were especially formative in honing her transaction skills.
Sophie is the perfect balance of East Coast determination and West Coast chill, with a huge appreciation for the significance of Home.
The time will come
when, with elation
you will greet yourself arriving
at your own door, in your own mirror
and each will smile at the other's welcome
- Derek Walcott
Read More
- T: 503-369-9139
- sophie@livingroomre.com
