There are many factors to consider when trying to decide between whether to rent or sell your home. Making the decision to rent or sell is definitely not black or white. It’s a complicated decision that takes careful planning, and it ultimately comes down to where you’re at right now, and where you want to go in life in the future. This article discusses both sides of this dilemma, with the hope of making it easier for you to make a more informed decision.
Selling Your Home
When deciding whether or not you should sell your home, there are many questions that people typically ask themselves before taking action. For example: How much money will I get? Find your home’s worth here with Clark County Market Values’ online home valuation tool. What will my new living arrangements be like? What is the state of the housing market? Will my new place be nice in comparison? Will I save any money on property taxes by selling? Do I have to pay capital gains taxes? It is important to answer these questions before taking action because chances are they will greatly impact your future buying and selling abilities.
People sell their homes for many reasons, including wanting more space, needing a new place that is closer to work, or simply not liking where they live anymore. The advantage of selling your home then becomes apparent when you sell it for enough money to afford a larger place with all of the same conveniences as your current living situation, while still having some leftover cash in your pocket after paying off any mortgage debt.
Pros of Selling Your Home:
- You might be able to upgrade without having to use all of your current savings.
- You can move somewhere where you’ll be happier.
- If it’s a seller’s market, you might be able to sell for maximum profit.
- You can cash in on your home equity.
- You don’t have to become a landlord.
Cons of Selling Your Home:
- It takes a lot of preparation to get ready to list your home.
- You, as the seller, typically pay both seller’s and buyer’s agent commissions.
- You could lose out on nice rental income every month.
- Your home could rise in value later on and give you profit at a later date.
- You have to go through the whole selling, home-buying, and moving process.
Renting Out Your Home
Renting your home to someone else can be a great decision because you are not required to sell it in order for the renter to move in, plus they will pay monthly rent, hopefully adding some nice income to your bank account.
As with selling your home, there are also many questions that people typically ask themselves before turning their home into a rental property. For example: How will I find renters? How do I become a landlord? Is it hard to be a landlord? Which is more profitable? What will my new living arrangements be like? Who might rent my house? How much rental income can I make? What are the average rental prices in my area? Do I hire a property manager or property management company? All of the above questions will need to be considered before you jump in and offer your home to renters.
Pros of Renting Your Home:
- Cashflow from tenant’s rent to pocket, cover expenses, save or invest.
- You keep your home and can sell it later on if it goes up in value.
- You continue to build equity and credit in that house.
- You have a property to fall back on.
- You can learn leadership skills and start a business as an investor.
Cons of Renting Your Home:
- You have to go find yourself new housing.
- Renters are not predictable.
- You have to calculate the risk to see if it will work.
- There are no guarantees that you’ll succeed as a landlord.
- You have to manage the property or pay a property manager to do it.
Deciding Whether To Rent Or Sell Your House
With both options having pros and cons, there are many factors that need to be thoughtfully considered before making any final decisions on which route is best for your current living situation. Here are some strategies that will get you closer to making an informed decision:
Read Books & Ask Experts
Talk to those who have been through the same thing as you and sell or rent out their homes. They will be able to offer advice, tips, and strategies that they have learned from personal experience. Talk with a top real estate agent, other landlords, investors, and your role models about the local housing market, your current mortgage payment, the pros and cons of owning rental properties, how to manage rental income, etc. There are many books available at your local bookstore or library that can give you helpful insight into renting versus selling a home. In order to make an informed choice, it is important to gather as much information as possible before taking action.
Inquire about Financing Options
Financing options might come into play depending on how much rent you could charge, what the local market is like near you, and how much money you might sell your home for. If you sell it for enough money to afford a larger place with all of the same conveniences as your current living situation, while still having some leftover cash in your pocket after paying off any mortgage debt, then you could benefit from not needing financing.
On the other hand, if you’re trying to sell and buy a new home while interest rates are really high, this could hurt you in the long run. In this instance, maybe it makes sense for you to rent your home out, especially if rent rates are stabilized on the higher end. Can you rent your house out, wait until interest rates are a little lower, and then sell? Or, does it make sense to sell now because property taxes are out of control? If you’re in need of financing help, ask your real estate agent to connect you with a couple of mortgage lenders. They can tell you about the different financing options available in your real estate market for buying or selling a rental property or your primary residence.
Consider Your Goals and Future Plans
Consider your future plans before making any final decisions since they might be impacted by how you sell or rent out your home now. If you really want to get into the world of real estate investing, put your head down, make a plan, and see what you can come up with. Talk with your realtors, lenders, mentors, and families to gauge how realistic your goals are, and how owning rental properties or selling might impact your long game.
What Will It Be?
If you sell or rent out your home, it really comes down to your goals and what you want more of in life. If you’re thinking of selling, you can use an online home valuation tool like the one Clark County Market Values offers. If you rent, then you get positive cash flow from the monthly rental income monthly which can cover all of your expenses while also leaving room for saving and investing. On the other hand, selling might give you a little more flexibility in where to live depending on how the local market is doing with housing prices in your area.
Deciding whether sell or rent is something many people have done before so there are lots of resources available online about these topics! Just remember that it all depends on where you are at and where you want to go, and if you can come up with a realistic plan to get there.