Dawna Davies and her assistant Jodi Blanchard did an exceptional job in helping us sell our home in San Luis Obispo. Dawna’s intelligence and knowledge of the business made the whole complex process easy for us to understand and navigate. What seemed like counter-intuitive advice at the start—that we should be extremely thorough in discovering any possible problems with the forty year old house and present them in advance—turned out to streamline the final transaction by building trust in potential buyers and removing the possibility of unpleasant surprises and uncertainty for us. Her contacts with a wide range of local business people who carried out many preparatory operations quickly and economically offered another unique benefit. Her tact and amiability made our numerous interactions pleasant rather than wary. And Jodi’s work in converting the box full of documents from our files into a coherent house-maintenance-history binder meticulous and creative. From start to finish our involvement with Davies Company was personally as well as financially rewarding.
- Determine who will care for the property- If the property is habitable, decide if you want to be a landlord personally or leave property vacant. Be realistic about your own expertise with property management in the state where your property is. Are there reliable property management companies available for service?
- Check for rental restrictions- Are there any limitations or requirements of owners of rental properties in the area where you own? Is there rent control? Check with the city and/or county, your HOA if applicable, a local landlord/tenant attorney.
- Do accurate math on holding costs- Calculate potential rental income and realistic costs to hold the property. These may include loan principal and interest payments, property taxes, landlord/tenant insurance, HOA dues and assessments, short-term and long-term maintenance expenses, management fee to yourself or to a professional management company. Are there any expected large expenses or improvements to the property in the next 3-5 years? Is there any anticipated risk on the parcel that may result in unforeseen expenses or loss of liability insurance? Underestimating these can cost you dearly.
- Are there benefits in keeping the property? There may be tax benefits, family or cultural heritage, future building potential, etc. Are there any anticipated market changes? This could include changes to nearby properties that may increase your property value or even zoning changes that may affect your real estate.
- Can you get another loan if you keep the property? Owning your current property may create limitations with your ability to get financing on your next property. Talk to a knowledgeable lender to help decide if it is better to keep or sell, with respect to your debt ratio as it will appear to an underwriter or loan investor for financing other investments.