Are you trying to decide between renting out or selling your home? Each has its own pros and cons, so this guide explains the advantages and disadvantages you need to understand to make an informed choice.
Pros and Cons: Renting Out Your Home Versus Selling It
Though nobody can tell you what’s right for your situation, you can make the best possible choice when you have all the information at hand. Here are a few things you should ask yourself before you even start to explore either idea:
- Can I afford to make payments on two homes at once?
- Is my old home appreciating in value, or is it depreciating?
- How would I oversee a rental property if I had one?
- Do I ever want to move back into my old home?
Here’s a closer look at the types of answers that can help you decide.
Can I Afford to Make Payments on Two Homes at Once?
First things first: If you can’t afford to make payments on two homes – because let’s face it, there’s a chance you may go several months (or longer) without a tenant in your home – you shouldn’t consider renting it. Instead, you should think about selling.
Related: 5 Reasons to Move From Up North to Boca Raton
Is My Old Home Appreciating in Value, or Is It Depreciating?
If you have equity in your home and can’t afford to make payments on two homes, the best solution may be to sell it. But if your home is growing in value each year – whether due to increasing property values or you’ve made improvements over time – it may be worth more in the long run if you rent it out.
How Would I Oversee a Rental Property If I Had One?
If you decide to rent your home, you’ll be a landlord with plenty of responsibilities. You can outsource or do it yourself, as long as you know that someone needs to handle everything from tenant disputes to managing repairs and maintenance. For many people, the best solution is to hire a property manager (which cuts into profits a bit).
Related: Why Now is a Great Time to Sell Your Home in Boca Raton
Do I Ever Want To Move Back Into My Old Home?
If there’s any chance you’d like to move back into your old home one day, renting it out can be a great way to maintain ownership while still collecting money. However, bear in mind that tenants – even the best of them – may not take care of your home the way you would.
Pros and Cons of Renting Versus Selling Your Home
Pros of renting:
- You can maintain ownership and collect money.
- You could benefit from appreciation in your home’s value.
- You can set the rent at a higher rate if the housing market is strong.
Cons of renting:
- You’ll have to manage tenant issues, maintenance, and repairs.
- You’ll need to carry rental property insurance.
- You may have to go a few months without tenants and therefore, no income.
Pros of selling:
- You can make a large profit if the housing market is strong.
- It’s less work than managing a rental property.
Cons of selling:
- You won’t benefit from appreciation in your home’s value.
- You’ll no longer have ownership of the property.
- You may not be able to get what you think it’s worth if the housing market is weak.
Making the Right Choice
Ultimately, there’s no right or wrong option when it comes to whether to rent out or sell your home. What’s right for you will depend on your financial situation, goals, and lifestyle.
Related: The Main Types of Mortgage Loans
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