It’
s not unusual for a homeowner to sell their home when they’re ready to move. Understandably, they need the cash to purchase a new home. However, others toy with moving into a new house and renting their current one. Should you sell or rent a home? It’s a tough decision for some.
Should I Sell or Rent a Home?
As mentioned above some are torn on this decision and many times it comes down to making financial choices. At the same time, there are other things to consider when deciding whether to sell or rent a home.
Affordability
Will your budget stand up to two mortgages? Likely, you’ll have to pay a mortgage for your new house and the rental house. Can you afford two mortgages? Sure, the rent will offset the cost of the mortgage to some extent. However, between tenants, you’ll have to pay the mortgage for the rental.
Also, you’ll want to cover the mortgage and earn a return on your investment or it’s not worth it to rent the house. Plan for unexpected repairs and maintenance. If you don’t, you’ll be losing money quickly.
On the other hand, there may be tax advantages to renting. Do the math, and figure out if the tax advantages outweigh the cost of a mortgage, insurance, taxes, and maintenance.
Property Management
Keep in mind, you’ll need a property manager. Either you’ll care for managing the property or you’ll need to hire a property manager. If you can afford it, a property manager is well worth it. They will fill vacancies, collect rent, respond to complaints, and handle evictions when necessary.
If your time is limited, you might want to consider a property manager. It’s not necessary to have a full time manager unless you have multiple rental units. Many property managers charge a percentage, and when weighted against the time spent, it’s worth the cost.
These are just a few of the things you’ll want to think about when deciding to sell or rent a home. If you plan to move or want to discuss selling your home, get in touch with me. I’d be happy to help.