Whether you’re just getting started in real estate investment and trying to decide if you should flip and sell or hold, or you’re a homeowner who is considering moving to a new area, you may be wondering: should you sell your house or lease it out? Both options come with different benefits as well as downsides. The decision to rent or sell is different for each person; prudently consider the positive and negative pieces of selling and renting. To help you make the decision, read on about pros and cons of renting or selling.
Benefits of selling your home
§ Prospect of making a large amount of money at once – If the worth of your home has improved, or the market is in a good shape, selling your home can permit you to get an excellent deal and make a large profit on the sale. You can then turn around and use that money as the down payment on your next purchase.
§ Reduce stress – It goes without saying that selling a home comes with its own stress, but once the sale is done, the stress is usually done as well. There isn’t the weight of taking on any of the remaining obligations that come with owning two homes and renting out one of them.
Downsides of selling your home
§ When it’s sold, it’s sold– If you rent out your home, you still possess the option to sell it down the road. But, if you sell your home, you will no longer have the option to consider renting it out if you change your mind. Furthermore, if you have second thoughts and you want another house in that area, you will have to go through the process of buying a home once more.
Upside of renting out a home
§ Make extra income/equity – Maybe the most noticeable advantage of renting out your home is that you can add an additional monthly revenue stream. That added income might even assist in paying off your own mortgage, or earning enough money to purchase another rental property.
§ Chance to wait for the perfect market – Let’s say the market isn’t in the best shape when you’re ready to move out, renting can be great opportunity. If you rent out the house, you can wait until the market recovers and then sell it for a more profitable deal.
Disadvantages of renting out a house
§ Additional responsibility – If you decide to rent out your home, you end up with more responsibility than if you went down the road of selling it. Landlords take on a multitude of responsibilities that you may be completely unfamiliar with. If you’re unwilling or unable to take on more work, selling your home is probably the best choice for you.
§ Lengthy list of possible expenses – Though you can certainly make money by leasing out your property, there are also several expenses that you may experience along the way. Some of the more common expenses a landlord takes on include: landlord insurance, repairs and replacements, upkeep, property management fees, and property taxes. Keep these expenses in mind when deciding if renting is truly the most rewarding option.
Everyone’s situation is different. There are definitely benefits to either selling or renting your property. A con for one person might not be a disadvantage for someone else. The good news is that you have options. Consider everything you just read, and make the decision that works best for you in your current situation.