"Clark Howard stated, 'You would want to be able to get rent more like $5,000 a month to justify tying up money in a property that's worth now around $560,000.' This highlights the importance of rental yield in determining the financial viability of holding a property as a rental."
"Howard pointed out that the gap between the current rent of $2,800 and the target of $5,000 represents a meaningful drag on the couple's wealth if they hold the property as a rental. This underscores the necessity of achieving competitive rental income."
A Utah couple with $450,000 in equity sought advice on whether to rent or sell their home worth $560,000. Clark Howard emphasized the importance of rental yield, stating that the current rent of $2,800 per month is insufficient compared to the property's value. He suggested a target rent of $5,000 to make the investment competitive. Additionally, he highlighted a tax benefit for homeowners, allowing couples to exclude up to $500,000 in capital gains if they meet residency requirements.
Read at 24/7 Wall St.
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