If you’re thinking about moving, selling your home may seem like the easiest way to cash out on your hard-earned equity. However, there’s actually another option that you might not have considered! Renting out your home after you move can provide some great passive income if the circumstances are right. Not sure whether you should rent or sell? Here’s what you need to know.
Rent or Sell: What’s Best for You?
When choosing between between renting or selling your home, it’s important to take a look at your individual financial situation first. While there is no “right” or “wrong” choice, each option comes with plenty of pros and cons. Here are a few factors to consider before you rent or sell.
Can you handle being a landlord?
If you do decide to rent out your home, you’ll have to take on a new role as a landlord. In reality, being a landlord might seem simple…but it involves a lot more than just collecting rent.
Before you list your house for rent, consider all the responsibilities a landlord has to handle. You’ll be responsible for filling vacancies, collecting rent, maintaining your property, and tackling issues with your tenants. To avoid these extra hassles, you could hire a property management company—but be prepared to pay them 8 – 10% of your rental income.
Can you make a profit?
When you sell your home, you’ll make an instant profit right after you hand over your keys to the buyer. However, many homeowners view renting as an attractive way to earn passive income over time. In the long run, renting can make you more money—but you have to be aware of any extra expenses, too.
Before you take the plunge, talk with an agent to determine what you can charge for rent each month. From there, you need to consider how much you still owe on your rental’s mortgage (if you have one), as well as what you’ll pay for insurance, taxes, repairs, vacancies, and property management. If it’s clear that you won’t make a profit over time, selling could be the better option.
How’s the market right now?
For the last few years, the Montgomery County area has been a hot seller’s market. That means homes often sell above asking price and don’t stay listed for very long. However, many experts have predicted that home values could go down due to the ongoing global health crisis—which makes renting a more popular alternative to selling.
Take some time to evaluate the current market before you make any decisions. If you want to sell while prices are still high, you may want to list right now. Alternatively, you could wait for the market to recover and take on a tenant to pick up some extra cash. Need some help making a decision? A great local agent can help you weigh your options and make the best choice.
Not Sure Whether You Should Rent or Sell?
If you’re stuck between renting or selling your home, I’d love to help! As your local Montgomery County real estate expert, I have the knowledge you need to navigate the ever-changing market. Just contact me today to get started—I can’t wait to team up!