Photo of a rental home as featured photo for a blog post.

Should I Sell Or Rent My House?

Many homeowners find themselves in an identical situation after months of house shopping, where they’ve finally located an exceptional property to move into, leaving them to ponder whether they should sell or rent their current home.

This is entirely dependent on your own financial position. In this article, we will cover the pros and cons of selling vs renting your house.

Renting Your House Out Instead of Selling

There are various reasons why homeowners may opt to rent rather than sell their current property.

Having a rental property can assist you in the following ways:

  • Continue to build equity in your old home with rental income
  • Diversify your assets
  • Maintain positive cash flow
  • Build wealth with extra income
  • Qualify you for additional tax deductions

Selling Your Home Instead of Renting It Out

Selling your home instead of renting it out may be advantageous in terms of avoiding capital gains tax and saving on maintenance costs.

You may also choose to sell rather than rent in order to:

  • Gain assets for a down payment
  • Avoid the responsibilities of being a property owner
  • Turn your property into liquid assets
  • Take advantage of a seller’s market and get more for your house

Questions To Ask Before Selling Or Renting Your Home

Still undecided about whether to rent or sell? Before making any sort of choice, you should always contact a professional real estate agent. To begin, here are vital questions to ask yourself to help you make an informed decision.

1. How Much Equity Do You Have In Your Home?

It is also important to assess whether you require equity in your existing house or not. Home equity is the difference between the value of your property and the amount you owe on your mortgage. If you have enough equity in your present house, selling it might be an excellent option. The profit you make might be utilized to make a substantial down payment on your next home or set aside for other purposes.

However, if you haven’t accumulated much equity or don’t need to use it, renting out your property and receiving long-term income may make more sense.

2. Is the Area a Rental or Owner Friendly Neighborhood?

When considering whether to rent or sell your property, examine the features of your house and the neighborhood. Perhaps there is a strong rental market in your neighborhood, or perhaps you reside near a local institution or industry. This may attract renters who are migrating to the area for education or jobs, ensuring a steady supply of candidates in the long run.

Alternatively, if your house is in a neighborhood where the majority of inhabitants are homeowners or the neighborhood lacks appealing features, you may have difficulty finding suitable renters.

3. Did You Buy Your Home During A Buyer’s Or Seller’s Market?

First, you should determine if you purchased your house during a buyer’s or seller’s market.

Because the situation of the property market at the time of purchase impacts the price, it will also play a part in selecting whether you should now sell or rent. For example, if you purchased your present house during a seller’s market when prices were high, you may prefer to sell it during one to recoup part of your investment. If you purchased during a buyer’s market and property prices in your region have increased, it may be time to sell. However, renting may make sense if you can earn a profit after paying your mortgage payment.

4. What’s The Market Like Now?

Knowing the current condition of your local real estate market can also assist you in deciding.

If your present market is slow, you can consider renting out your home until you can sell it for a greater price in the coming years.

In a seller’s market, on the other hand, you may wish to sell your house for the highest possible price.

5. Will Your Homeowners Association (HOA) Permit You to Rent Out Your Home?

If you own a condominium or a property maintained by your HOA, you may be unable to rent your home without the association’s permission. Many condominium communities may prohibit rentals or desire to maintain a ratio of owner-occupied to rental units. So, even if you believe renting is the best option for you, your organization may not agree.

6. What Is The Condition Of The Home?

If your property needs repairs or improvements, you may be able to locate a buyer ready to acquire a fixer-upper in exchange for a price reduction.

However, renters may be more drawn to a property with all the bells and whistles. You may have an easier time getting well-paying tenants to reside in your property if your home has luxurious landscaping and top-notch safety features.

7. How Much Can Your Home Appreciate?

One of the best aspects of real estate is that its value often increases with time. If your research and knowledge of the area where your home is located show that property prices will rise over time, renting and waiting to sell may make more sense.

Otherwise, it may be better to sell.

Hopefully, after reading this article, you’ll be able to better answer the pressing dilemma of “Should I rent or sell my house?” By thoroughly studying current market conditions as well as the benefits and drawbacks of each option, you’ll be better equipped to decide what’s best for you.

If you want to learn more real estate tips, from buying and selling homes to home maintenance guides, stay updated by clicking here to see more of our blog posts.