Should I Sell or Rent my Home? 5 Things to Consider
Asking yourself “should I sell my home” is a major life decision and requires a lot of thought, research, and discussion. Though, other people wonder if instead of up-rooting completely, ask themselves “should I rent my home or sell it” instead. Both are valid options and big changes that are life changing. So, before running off to a Realtor and wanting help to sell your Coeur d’Alene home take a few minutes to consider these 5 things.
Will Renting my Home be Profitable?
Part of the conversation you should have with yourself or those it would affect when thinking “should I sell or rent my home” is if renting would make more money than selling. You shouldn’t rent your home out just to get rid of it and to break even, you should profit from it as well. If you’re not generating any positive cash flow then your property will begin to empty your coffers, quickly or slowly, but it will happen for sure.
You can better determine if it’s better to sell or rent by adding up rental expenses, subtract it from the money you’d make, and the possible tax breaks you’d receive. There are good rental calculators to help you figure out the answer to “should I rent or sell my home”. Also, taking a look at the area your house is in and seeing the average rental prices will give you an idea of what’s possible income-wise. Being the most expensive house to rent doesn’t bode well for positive cash-flow.
What’s my Home Value?
The “sell my home” sites often give inaccurate figures on your home’s value, it’s better to speak with a good real estate agent and have them prepare a market analysis for you. The value of your home should be one of the first and most important pieces of information to consider in the “should I rent my home or sell it” debate. If the value of your home is more profitable and a better fit for your goals than renting it, then the debate has been mostly settled and the question solved.
If you find that your home’s value could increase with some fixing up, perhaps consider renting it while improving it instead. Renting for a short period of time can bring in positive-cash flow while also raising the value of your home without costing you too much. Who says the debate has to be “should I sell or rent my home”, it could be both.
Can you be a Landlord?
It’s a full-time job to run a rental property and if you’re not up for it then it may not be for you. You’re on-call and have to be on top of the property, responsible for all maintenance, running background checks, and be available for emergencies. Also, there are laws and restrictions that a landlord must abide by. From state to local ordinances, it can be a tricky thing to own a rental property.
There is an option to hire a property manager but, factor that into the profitability of renting and the time managing the property manager. If you decide to go this route, budget in around 10% of your rental revenue. Remember that having a positive cash flow should come from renting your home.
What’s the Market Like?
This goes back to the profitability of renting your home. In the “should I rent or sell my home” debate, the market is a major factor. Even for renting, the average listing price to rent dictates profitability and the housing market itself dictates what you can get if wanting to sell. If the market isn’t the best and you want to wait it out, then you can rent it in the meantime. Though, if the housing market is booming for sellers then call your Realtor. You always want to strike when the market is in your favor, especially if you can end up getting more than you put in. Currently, the market is very much in favor of sellers and it’s a great time to start the “sell my home” search.
Are You Relocating?
If you’re moving on from your current area, you should also lean more towards the “sell my home” rather than renting. It’s terribly difficult to manage a rental property from a distance and quite expensive, even with a property manager or superintendent. They both cost money and you’d still need to come back every so often to handle business. Also, out of state income is its own can of worms come tax time. If you’re planning on starting anew elsewhere then in the “should I rent or sell my home” debate, lean towards finding a Realtor for sure.
Sell My Home?
It comes down to what works for you and what makes financial sense. For some people, it’s better to rent out your property while waiting for the market to pick-up and for others, better to sell. Either way, talk with a realtor and see what your options are and what is best for you. Nothing wrong with looking at all the information but, keep in my mind that the market is hot right now.