BloggerOn
According to the National Association of Realtors, 5.34 million existing American homes were sold in 2019.
Some people choose to sell properties and earn a bulk sum of money from the sale. While other people choose to rent their property and earn a regular monthly income. But deciding whether to sell or rent your property can be a difficult choice and one that requires a lot of thought.
In this guide, we’ll look at 6 factors you need to consider before choosing whether to sell or rent your property.
1. What Profit Can You Make?
The first consideration when it comes to should I sell or rent my house is the profit. Profit should be your main focus when thinking about whether you want to sell or rent.
For those who are still paying off a mortgage on the house then you’ll need to evaluate this in the running costs. You’ll not only be paying a mortgage on the rental property, but also on your new one, so make sure you ask yourself can you afford both?
On top of mortgage costs, there are other expenses that come with renting, including:
- Home insurance (on the rental property, which is more than usual homeowner’s insurance)
- Property taxes and fees
- Property maintenance and repairs
- Property management costs (whether covered by you or an expert)
You might also need to think about the cost of your property if it doesn’t have any tenants. A vacant property can lead to not only zero profit but put you in the red.
Once you’ve calculated the above expenses, you can then work out whether you can make a profit with the current rental market prices. Sometimes renting might cost more annually than it brings in, so make sure you look into every possible expense.
2. What Is Your Financial Situation and Reason for Wanting to Sell or Rent?
Is it better to sell or is it better to rent? This all comes down to your financial situation and the reasons you want to sell or rent.
Renting is a great option for those who are already financially secure and want to reap the benefits of regular income. Whereas selling is a good option for those who want to make a quick profit and have the money sooner rather than later.
Your financial situation might not align with your goal, so remember there are always options when it comes to money, so if you want to rent but aren’t sure if you can afford it speak to a financial advisor. Financial advisors might be able to help you set up a payment plan that works for you and your money.
3. What Does the House Mean to You?
Those who have grown up in their family houses or who have received a house through inheritance might prefer to keep the property. If the house means something to you or you want to move back into it in the future, then renting makes more sense.
Or if you are moving away for a while and think that you’ll want to return to the same house, then renting is also a good option. Downsizing or committing to a big change are other reasons why you might want to keep the property in your possession.
Remember once you’ve sold a property it is out of your hands, there is no going back. And the new owners might increase the value to more than you can afford to buy it back. So if there is any small thought in your mind that you want to someday return to the property, renting might be the best option.
4. Are Home Improvements Viable?
For those who want to sell, you might want to consider whether home improvements are viable. Most homebuyers want modern and fresh homes that they can buy and move straight into. These are the properties that sell quickly and that earn you the most profit.
However, if home improvements are viable because you don’t have the budget or because you don’t have the time, then maybe renting is the best choice for now. Remember that you want to get the most for your money. So one option could be to rent until you can perform the home improvements and then think about selling.
Tenants are often less bothered about a new, fresh, and modern home, but renting allows you to earn some money while you wait to do it up.
5. Do You Want Landlord Responsibilities?
Renting comes with its own problems with property management. You have two options, you either handle everything yourself or pay someone to do it for you. Either way, you’re going to lose out on time or money, but it’s important to think about which choice is right for you.
Taking on the role of the landlord can be stressful. Landlord responsibilities include finding and screening tenants, repairing and maintaining the property, and chasing up late rent payments.
If you definitely want to rent the property but have never experienced being a landlord, you might want to consider getting a property manager to help you. They often take a cut of between 10% or 15% of the rental price but for this manage everything for you.
6. How Is the Real Estate Market Looking?
Another thing to consider is the real estate market. If the market is looking good and properties are selling well then you might want to think about selling.
However, if the real estate market is low and house prices are struggling then you might be put off selling. In which case, you can rent the property out and wait for the market to pick up or you could sell to an investor, who might be able to help you get a good price.
Talk to real estate agents about the market and your local area to find out what the right choice for you is. Ask questions to those who know the property market the best and you should be able to work out what is the right thing to do for both your property and yourself.
Decide Whether to Sell or Rent Your Home
Use our guide to decide whether to sell or rent your home. Remember that there are advantages and disadvantages to both options and to choose the decision that is right for you. No matter what you decide, you will need to spruce up your home with some improvements. Discover our home improvement articles to find out how to get your home ready for selling or renting.
