Staff Writer, Stacker

Head of Marketing

Renting out a home you love can be as daunting as selling. That's why Belong has developed a 'middle ground' for downsizers in a sell or hold dilemma.

Time to Downsize? Consider the Pros and Cons of Selling or Renting

When it's time to downsize your home, the decision to sell can be a painful one. But renting it out to strangers can be equally daunting. That's why Belong has developed a 'middle ground' for downsizers who are facing the 'sell or hold' dilemma.

There are plenty of reasons for hanging on to a beloved home, even if it no longer suits your lifestyle. Perhaps you want to see your own kids (or grandkids) live there someday. Maybe you want to travel for a year or two while you decide. Perhaps you want to move to a smaller place, but don’t want to sell the house because property values in the neighborhood are going up, and you want to maximize your potential profit.

There are many options you have at this point in your life. But if you want to keep the house, the biggest challenge you will face is finding the right person to live in it.

Many homeowners choose to sell their current home when it’s time for them to downsize. Often, they’ve lived in their current home for years or decades, and built a considerable amount of equity in the property. But selling your home may not be the best option if you want to prioritize ongoing cash flow, bequeath the property to a relative, or simply hold the home for sentimental reasons. 

Cash out on the equity you’ve built in your home. Selling your home, especially one you’ve lived in for more than 2 years, can result in a large amount of cash immediately becoming available to you. 

Reduce property maintenance time and costs. When you sell your home in order to purchase or rent a smaller property, you immediately reduce the amount of yard work, maintenance, and general property management required. 

Market conditions can make returns uncertain. Realtor.com predicts that 2023 will be a “nobody’s market,” where inventory increases but prices remain high. You may wish to downsize during a period when market conditions are not favorable to sellers, and if that’s the case, holding on to your property may be a better option. 

Capital gains taxes may cut into profits. It’s easy to forget Uncle Sam’s portion of your equity gains may be larger than you thought. Capital gains taxes can be as high as 37% in some cases, so be sure to consider this when choosing whether to sell or hold your home. 

Since 2008, with the dawn of AirBnB and the growing popularity of renting vacation homes for shorter time periods, many homeowners have chosen to move out of their home and turn it into a vacation rental rather than sell it. This is appealing for homeowners that want to continue letting their equity grow, while also covering their mortgage payments and even earning additional income. Vacation rentals aren’t passive income, however, and complaints with short-term rental companies have been in the news throughout 2022. 

Pros of turning your home into a vacation rental

Earn regular extra income. Nightly rates for vacation properties often exceed the average nightly price of long-term rentals, and several bookings a month can often comfortably cover your mortgage and earn you extra income. 

Deduct many expenses. Because your vacation rental is considered a business, you can deduct related expenses such as cleaning and marketing costs. 

Cons of turning your home into a vacation rental

Property damage is more likely to occur. A common complaint among vacation property owners is the vacationers themselves. It only takes one unauthorized party or rowdy group of guests to inflict a lot of damage to your home, and the recourse may not be enough to cover the damages.

Market fluctuations impact the ROI significantly. Vacation rentals are highly impacted by the overall economy and travel trends. And right now, the trend is downward. While the highs of vacation rental ownership are certainly high, the lows can be especially painful if you’re not prepared. 

Changing regulations may interrupt your business. Many cities are banning or significantly limiting short-term rentals, citing concerns with housing availability. These regulations may not be in your city currently, but they are spreading across the country and represent a risk to consider. 

Marketing, cleaning, and customer service required. The income from short-term rentals is far from passive. In most cases, you’ll be directly responsible for communicating with guests, arranging cleaning and maintenance services, and generally keeping the business running. If you’re downsizing in order to live a simpler life, a vacation rental is not a great option. 

Pros and cons of renting your home long-term

The third (and we’d argue best) option for homeowners that want to downsize their living space is to list their home as a long-term rental. Long term rental properties earn owners steady, predictable, and sometimes even guaranteed income when working with a partner like Belong. Unlike vacation rentals, long-term rentals offer stability to both homeowner and resident, and finding a qualified partner to manage the property day-to-day is much easier. 

Passive (sometimes guaranteed) income. Long-term rentals, when managed by a qualified partner like Belong, can result in truly passive income. Special programs may even guarantee your rental income, even if tenants pay late or the property has a period of vacancy. 

Long-term leases mean less fluctuation (and less stress). Longer-term residents mean shorter-term vacancies and a more consistent experience for homeowners and residents alike. 

Better care is taken of the property. Residents that live in (and love!) your property full-time are more likely to care for your home as if it is their own. And high-quality property management partners like Belong will ensure maintenance problems are addressed immediately, keeping your property well-taken care of without you needing to lift a finger. 

Equity isn’t liquid. If you need to access your equity in cash, perhaps in order to purchase your next home outright, selling may be a better option for you. 

Less access to the property during the lease term. Residents have strongly-protected rights to privacy, so if you want to visit the property frequently or even stay there on occasion, a short-term rental situation may be better for you. 

How Belong is making life easier for downsizers

Downsizers love Belong because we put great residents in their home, keeping it well loved and well maintained, helping the home appreciate while you’re not in it. And if you do decide its time to sell, the management fees that Belong collects could get credited to offset some of the commission earned from the sale of the house. We call that a win-win! 

Belong is not a property management company, but a residential network offering unique services to both homeowners and their residents. From not charging fees for the essentials to guaranteeing rent, Belong will partner with you to achieve financial freedom. And you'll never need to lift a finger. 

Learn more and find out if your home is eligible at belong.com/homeowners.

How much do property managers charge? And how do these fees compare to Belong's alternative full-service experience for rental property homeowners?

Property Management Fees: How Much Do Property Managers Charge?

Whether you’re a first time investor or simply tired of the headaches of self-managing your rental home, hiring a property manager or an alternative like Belong can go a long way in buying back your time and peace of mind. But how much do property managers charge? And how do the fees compare to a full-service experience like what Belong provides? 

To get the answers on the cost of property management and its alternatives, we’re going to break down the common costs that property managers charge and how we do things differently. 

Typical property management fees and common markups

Property management companies charge a percentage of the rent collected from your home. Most property management fees are in the range of 6 - 12% of your monthly rental price. So if you’re renting your home at $2,000 per month, you’re likely to pay between $120 - $240 a month. 

It sounds pretty straightforward, however there’s a huge discrepancy in what property management companies offer for that price. Many property managers that offer lower percentage rates make up their costs in other ways, so check the fine print before high-fiving yourself over getting a bargain. For example, a lower fee may mean that the property manager charges additional fees for a number of essential services such as marketing, inspections, lease renewals, and support if you need to evict a bad tenant. 

If your property manager fees are based on ‘rent due’, this also means they can continue to collect fees during vacancies or when tenants are late with their rent, so you’re paying fees even when you’re not earning any income. If the fee is based on ‘rent collected’, you are paying a fee out of what your tenants have paid — a much safer option for you and will motivate your property manager to handle issues quickly in order to get paid. Property management companies that charge vacancy fees to manage the home when empty will usually cost up to one month’s rent. 

Common property management fees additional to the monthly rate include:

Placement fee: Up to 100% of the first months rent

Communication after hours or during holiday periods: 25% surcharge on rates

Advertising fees for online listings: $150

There are also strict limitations on what many provide, especially when it comes to things like communication with your tenants or eviction support. Some property management companies will advertise that they offer free eviction support or charge a premium for eviction protection, only to limit the support to basic legal fees of around $500. That’s all well and good if things run smoothly, but additional legal support can quickly escalate costs, leaving homeowners without adequate financial coverage. 

The other thing to watch out for in the fine print is the fees for terminating a contract or including a commitment to sell. Some property management companies formalize this in their rental contracts, limiting your options if you choose to sell the home. 

Belong isn’t a traditional property management company, offering a fully transparent, people-first approach to managing rental homes that feels more like a hospitality experience. We look after our homeowners and residents so well that you won’t need to lift a finger. 

Belong charges a home management fee (unlock pricing for your city here) and placement fee (around 50 - 75% of the first month's rent).

Once you’ve calculated how much this will cost, that is all you’ll pay. We are proud to be full-service and don’t believe in surcharges or hiding fees. There's no setup costs and we don't sneak in surcharges like lease renewal fees or must-have inclusions like video marketing and eviction protection. 

Belong’s monthly management fee rate includes:

Guaranteed Rent: Receive your rent on time, every month, regardless of when it’s paid by residents

24/7 Concierge Support: Both homeowners and residents have access to real-time support, going beyond emergency maintenance requests.

Modern-day marketing: Virtual tours and video marketing is included in listings

User-friendly app: Belong's app provides convenient access to documentation, cash flow insights, and financial and insurance solutions. 

Long-term residents: Belong takes a personalized approach to match the right people, so they stay longer and feel at home.

Market-driven insights: Belong utilizes market data and real-time interest to maximize the value of your home.

Eviction protection: Owners are shielded from legal costs if we ever place the wrong people

Extensive vendor network: Belong connects homeowners with a vetted network of over 10,000 professionals for repairs and renovations.

Comprehensive insurance solutions: Belong offers insurance options that protect homeowners, their properties, and residents.

Innovative financial solutions: Homeowners can manage cash flow effectively, even splitting the cost of maintenance and placement fees. 

We want all of our homeowners to be cash flow positive, so we don’t charge you when your home is vacant. We don’t lock you in a commitment to sell your home with us either.

What about a fixed property management fee?

It’s uncommon, but there are some property management companies that offer a fixed monthly rate structure, rather than a percentage of your rent. These offers typically exist in markets with below-average rates, so the cost tends to be similar to a percentage rate rather than any massive discount. 

Before accepting a fixed-fee, consider that there are likely still many add-ons to this cost and that your property manager may be less motivated to get the best price for your home without a financial incentive to do so. 

Are property management fees tax deductible? What about Belong’s fees?

In short, yes, property management fees for a rental property are tax-deductible. A property you don't use for yourself or family is seen as an investment or business, so the cost of managing the property is tax deductible.

This also means you can claim fees from Belong. Belong takes on all of the responsibility of looking after your home and residents, so you can include fees and maintenance from our professional tradespeople as a deduction in your tax return. 

Ready to make the switch to reimagined Property Management?

We've got you covered. Belong is simplifying the rental experience across the US and helping more homeowners reach their financial goals with the most hassle-free property management service; BelongPro.

We want to make sure you have everything you need to find the perfect rental home for you and your family so that your move is as smooth as possible.

Stop Looking For a Place to Rent and Find a Place to Belong

We know finding the right place to live is hard, so let us help.

We are Belong, and we know that renting is the best option for many people looking for a place to live. We want to make sure you have everything you need to find the perfect rental home for you and your family so that your move is as smooth as possible.

Renting might be better than buying a home

Renting is more affordable than ever before: You don't have to put down a big deposit or pay closing costs on a rental property—all of that is taken care of by your landlord (or in this case, Belong). And if you're still paying off student loans or other debts, renting can be a great way to save money while you focus on building up your credit score (so when it comes time to buy, you'll have an easier time getting approved).

You won't have to worry about maintenance: When it comes time for repairs or updates, we will take care of everything for you! That means less stress for you and more time to focus on what matters most: enjoying life with your family!

When you're looking for a rental home, it's easy to feel like you're in over your head. There are so many things you have to think about—and if you're like me, some of those things are way above your pay grade.

However, there is one thing that we have learned: renting is a great way to save money and live comfortably without having to take on the responsibility of purchasing a property.

You can't put a price on peace of mind—and if you live in an apartment or townhouse instead of owning a house, then you don't have to worry about all the maintenance that goes along with owning a home. You don't have to worry about fixing anything or keeping up with property taxes. You just enjoy your own space and relax whenever possible.

If this sounds appealing to you, check out our webpage! We'll help make renting easy by showing only properties where we know we can get you approved for rent.

If you're looking for a place to rent, you've probably already thought about buying. But did you know that renting can be a better choice?

When you buy a home, you make a lot of sacrifices. You can't move around as much, and you have to pay more taxes and insurance. Plus, there's always the chance that your home could lose value—and even drop by more than half its original value. Not good!

Sometimes is better because it gives you more freedom and flexibility. If you ever decide to move out of town or change jobs, it's much easier when all your stuff is already packed up in boxes or stored away. And if you do decide to sell? You won't have any regrets about what might have been had things gone differently!

If you're like most people, you dream of owning a home. It's that American Dream thing: owning something that is truly yours, where you can plant roots and make memories.

This all sounds great but when you start looking at houses, it became clear that renting was actually a better choice for me right now. Here are just a few reasons why renting is the way to go!

Did you know that the average homeowner spends $1,200 per month on their mortgage? That's $14,400 per year! If you factor in taxes and insurance costs as well, it gets even higher—$23,000 per year! And if you're planning on moving within five years or so (which most people do), then the equity you'll build up in your house may not cover the cost of selling it. So even if it does work out for you financially, the cost of moving and buying again is going to be pretty steep.

Belong is here to help find the perfect rental home for YOU!

If you are ready to find the place you Belong, just visit our website and let’s get started! 

Enjoy the benefits of renting out your home without all the hassle, with guaranteed rent and innovative new services not available from property managers.

What Are The Benefits of Belong Over a Regular Property Management Company?

Getting the most out of your investment is quite important when you buy a house. This is why experienced real estate investors always work with a good management company.  

But what if you don't need to be an experienced real estate investor to start earning money with your property? With Belong, you can have all the benefits of renting out your home without all the hassle that property management implies. Keep reading and discover the advantages of Belong.

With our services, we'll find people who Belong at your home. Our tenant (or as we call them - resident) selection process involves a thorough screening process to find trustworthy residents, so you don't have to worry about it.

Some of the problems of renting out your house if having to go after your tenants and dealing with late payments. With Belong, you will receive your money on time, every time. 

Happy tenants mean longer rentals which means consistent cash flow for you. 

It takes one tricky tenant to cause significant legal headaches. Belong has a qualified team with knowledge of the latest landlord-tenant laws and will make sure you don't have to worry about all the legal parts.  

If you charge too much, you might not rent at all, if it's too low, you are losing money each month. Finding the right price requires experience and access to specific tools that you might have never heard of. With Belong you can forget about all that trouble and just enjoy your extra time (and cash!)

Have you ever put up an ad to sell something? If you have, you know how time-consuming it can be. The good news is you don't have to do that! We will advertise your property with incredible results. 

This is actually the best part: With Belong, you will have guaranteed rental payments, continuous cash flow, maximized rental value, AND free time! 

These results can only be expected from a trustworthy company like Belong. A poor choice of a management company can produce many headaches of its own. So if you are ready to Belong, all you have to do is visit our website and follow a few simple steps. 

Belong

Afton Brazzoni

Jane Allison Gunn

Melanie Kershaw

Dom Difurio

Sparsh Mehta

Afton Brazzoni

Jane Allison Gunn

Melanie Kershaw

Dom Difurio

Sparsh Mehta