Analyzing whether to sell or rent your home is a BIG deal…and it deserves careful consideration. Ultimately, the right choice for you depends on your financial situation, goals, and personal preferences. Here is a quick run-down to help you decide:

Renting Out Your Home Might Make Sense If…

• You don’t need the funds from your current home to purchase another home
• You’re moving temporarily and planning to return to the area
• You think your home’s value will drastically increase within the next few years
• The rental market is especially hot in your area
• You have the time and know-how to screen tenants, manage rent/collections, and make home repairs (or would have enough cash flow to pay for third-party management)
• Rental income is part of your long-term investment strategy

Selling Your Home Might Make Sense If…

• You need to use the equity from your current home to purchase another home
• Rent wouldn’t generate enough cash flow to cover things like vacancies, maintenance, repairs, and landlord insurance in addition to the existing mortgage, taxes, and HOA dues
• You don’t want to take on the risks, time commitment, and challenges of being a landlord
• You’re uncomfortable with the landlord-tenant laws in your area
• A home sale would generate a large profit (and has been your primary residence for at least 2 out of the last 5 years so that you’re eligible for capital gains tax exemptions)
• You’re concerned a future recession might negatively impact your finances

Before reaching a conclusion, it’s a good idea to familiarize yourself with the landlord-tenant-law specific to your state (and in some cases, separate relevant ordinances in the city and/or county that your property lies within). You should also do some market research to get a feel for price/condition of similar homes for rent and for sale in your neighborhood.

It probably makes sense to talk with a property management professional to clearly understand what you can expect to net as a landlord. You can also reach out to me any time for an accurate estimate of your home’s value should you decide to sell.

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