Are you moving to a new home? Or simply wish to make profits from the property in which you have invested? You can then rent your home.
Well, if yes, we completely understand the debate you are having in your head about whether to rent or sell your home.
The choice for anyone depends on various factors such as financial situation, market conditions, costs, and so on. So, what would be the most appropriate decision for you?
Both renting and selling the home have their pros and cons. You need to figure out what suits best for you as per all the conditions and factors around you.
So, let’s understand some of these factors that will help you decide if you should rent your home instead of selling it or not.
When Should You Rent Your Home?
If you are looking to make some extra monthly income, renting your home is a go-to option. But you also need to ensure that after incurring the additional expenses and taxes, you are still making a profit.
Here are a few factors that may support your decision to rent your home.
You Are Temporarily Moving
If you are moving to a new home temporarily, you may later require to return to the place where you are currently residing.
The reason could be anything, a temporary job shift, or temporary shifting to a location for some specific purpose. Renting your home in such a scenario will give you relief. You’ll have a home to live in when you return.
Not only this but renting a home could be comparatively hassle-free and cheaper. It is easier than finding a new home when you return.
You Want To Invest The Rental Income
As renting your home will give you a regular income. If you are looking for some extra earnings by investing this income, renting could be better for you than selling your home.
You could try various methods of investing. It can be rental income such as fixed deposits for reaping interest, government schemes, and so on.
Alternatively, you could also use the rental income to pay the EMIs of your new home if you have purchased it on loan.
Your Cost Of Renting Is Low
You can gain money in both renting and selling. However, renting and selling both have some costs involved.
What majorly determines your decision of whether to rent or sell your home is the profit that you gain after incurring all these costs.
The costs of renting may include home repairs and maintenance, insurance, taxes, the cost of vacancies, and so on. If these costs are low for you and if you are able to make enough profits, then renting your home could be a good choice for you.
When Should You Sell Your Home?
If the above-mentioned factors are in your favor you should go for renting. If not, then below are some factors that will help you make more sense in selling your home.
You Need Cash To Pay For Buying A New Home
If you are moving to a new home and you require liquid cash for purchasing it, you could sell your current home and utilize the proceeds from the sale for buying your new home.
Also, you are not required to opt for any mortgage loan and undergo the long approval process if the equity of your current home is enough to buy a new home. As a result, it will help you to pay your new down payment.
In case, your current home is the only one you could rely on to pay for purchasing the new home. So, there is no point in thinking about renting your home.
You Aren’t Ready To Become A Landlord
Renting your home can help you generate a passive income, but becoming a landlord comes with a lot of responsibilities. You also need to be prepared to take the additional expenses such as home maintenance, repairs, taxes, and so on.
You are also responsible to find “good” tenants and take up the cost of vacancies if any.
You may also reach out to some property management company to look after all these things. But they would charge you a percentage of your rental income. This will cause a reduction in your profits.
If you aren’t ready to take up all these responsibilities and costs as a landlord, deciding to sell your home may sound good to you.
You Are Existing In A Seller’s Market
If you are in a seller’s market, where the number of buyers is more than the homes available for selling, then you should think about selling your home.
As the buyers in such a market have a limited number of options to select from. You can manage to get more attention to get your property sold.
You may also get an opportunity to increase the value of your property. You can also get genuine buyers that will pay the value that you desire.
If you think you will be able to incur the associated selling costs yet make enough profit by selling your property in such a market than the rental income that you could get, selling your home more would make more sense.
Deciding whether to rent or sell your home, requires you to analyze certain important factors as mentioned above such as costs, profits, responsibilities, market conditions, and so on.
It is also important for you to understand your goals and consider your financial situation and lifestyle choices while deciding whether to rent or sell your home.
In addition to conducting thorough research, you can also seek the opinion of a professional real estate agent or company. They may help you to make the most appropriate decision by providing you with information about the current real estate market conditions, the value of your home, or the rent charged in your area.
Get in touch for a more expert opinion!