Should You Sell Your Home Or Rent It Out?
Sometimes, you decide exactly when you’d like to move. Other times, life swoops in and decides for you. Your company might transfer you, a family emergency might require relocation, or you might finally find the love of your life—three states over. Should you sell your house or hang on to it as a rental property? Here are 5 important considerations.
1. Are you gone for good?
Or do you need an exit strategy? If there’s a good chance you’ll return to your current home in a year or two, the money and time you spend selling your home and then buying a new one might make renting it out a smarter option.
2. How’s the rental market?
Look at online rental sites to see what properties in your neighborhood and in similar condition to yours are renting for. Are there a lot of listings? Think about what you might charge and what you might have to do to bring your property up to the market standard. You can then get an idea whether your potential rental income will cover your expenses.
3. Where’s the neighborhood heading?
A lot of factors feed into property values, from national trends to long-term construction plans. An agent can help you understand your property’s potential for appreciation and whether or not it might pay to hang onto it.
4. How much is the hassle of being a landlord worth?
Unless you pay for a property management company (about 10 percent of the rental income), dealing with issues, emergencies and uncooperative renters (sometimes all at once, often in the middle of the night) can be trying. Ask yourself if it’s worth the stress.
5. What are the tax implications?
Each situation is unique, so before you decide to rent out your home consider talking with a tax professional. They can help you figure out how much you can expect to pay in taxes on the rental income.