Choosing between selling or renting your home? No doubt, this is a big decision. That’s because moving out of your home includes not only finances, but plenty of emotions too. Trust us, you do not want to make the wrong move. And if you’ve landed on this article, odds are you’ve asked yourself, “should I rent my home?” at least once. With more than fifteen years of experience in the real estate and property management industries, we are no strangers to this common dilemma. We’ve helped thousands of homeowners just like you make the right decision — one that makes sense both for your life now and in the future. So, wondering if renting is right for you? Read on for some of the most important questions to answer and the considerations you should be aware of so you can feel confident you are making the right decision for YOU!
High-Level Considerations of Renting vs. Selling
There are a few main considerations to keep in mind as you choose between selling and renting your home:
Circumstances and Permanence of Your Move
First things first, get clear on why you need to move. Will this be temporary or longer-term? If you’re moving for a more permanent reason and you won’t likely be returning, like maybe relocating for a new job, you may want to consider selling your home rather than renting it out. That’s because there are many logistical demands that come along with owning a rental property. Depending on your unique home and set of circumstances, it may be less stressful to just offload the property. Note: There are certainly exceptions here, though. A great property manager can help you oversee your property even from afar. If you’re relocating temporarily (maybe for a family emergency or similar) and plan to come back, though, renting could make more sense. For one thing, it’s likely the cheaper option when compared to paying commission on the sale of your home. Not to mention the need to purchase a new home when you return, which comes with its own set of responsibilities and financial implications. Whatever the case may be, the circumstances surrounding your move are important here. An investor-friendly real estate agent or a seasoned property management professional can provide more personalized guidance and advice.
Equity and Affordability
It’s important to have a clear picture of your finances before you decide to sell or rent your property. If you need the funds from the sale of your property to purchase a new home, for example, renting may not be for you. On the other hand, say you can purchase a new home without additional funds. A smart alternative might be renting your home and taking out a home equity line of credit (HELOC) to fund the down payment on your new house. Be sure that the rent on your first property can cover your mortgage PLUS your HELOC payment and over time you will pay down your line of credit with a tenant’s money. Talk about a win-win! Again, it might be a good idea to speak with a real estate or PM pro here. They’ll have more insight into the market and can recommend options tailored to your specific needs.
Renting is right for you if…
Curiosity piqued? Let’s explore some of the most common situations that might make renting your home all the more attractive.
You Don’t Need the Equity From Your Home to Afford a Move
If you can afford to move and purchase a new home without using the funds you would gain from selling your current home, renting is a great option! This way, you’ll reap the long-term benefits of property as an asset. If you’re relying on that windfall, though, you might be out of luck.
You are Interested in Collecting the Cash Flow
Speaking of assets, if you can keep your current property and obtain a new one, renting can be a great source of monthly cash flow! If your home’s projected rental rate is enough to cover the mortgage, taxes, and the occasional repair, you could use this income to build your retirement, pad your savings, or prioritize other spending. The deductions from your mortgage and any repairs can also come in handy, as you might not have to pay taxes on this income. And if your home increases in value over time? You’re sure to see that appreciation in a lump sum when you do eventually decide to sell it. Cha-ching!
You are Willing to Oversee or Outsource the Property Management
A big question to answer when deciding to rent or sell your home is, “who will take care of it?” Some owners are ready and willing to step up to the plate. If you’re handy and knowledgeable, you could serve as your own PM. In fact, we have an entire comprehensive guide to help you out every step of the way. Others opt for a professional property management company. These seasoned pros can assist with tasks like:
- Interacting with your residents
- Regularly inspecting your property
- Providing local market knowledge
- Recommending neighborhoods to invest in
- Keeping an eye on your property during a vacancy
- Identifying areas that need Section 8 or subsidy funding
- And more
Basically, you’ll get all the benefits of rental income without the headache of managing. Still, others might be uncomfortable with a tenant to manage at all. And that’s totally fair! If this sounds more like you, though, selling really might be best.
Final Thoughts: Should I Rent My Home?
Phewf! There’s certainly a lot to think about as a property owner considering whether to sell or rent your home. Don’t let that bog you down, though. The truth is that there is no one right answer. The path forward will depend almost entirely on your property, finances, and situation. While you may have some initial answers now, speaking with a real estate or property management pro should be your next step. Remember, you don’t have to go it alone! If you need help buying, selling, or managing a home, let property management companies like Evernest execute the work for you. Our investor-friendly agents can help make the sale, or have our dedicated and experienced property managers handle leasing, repairs, maintenance, and more. We’ll be here to help you every step of the way, no matter what you decide.
