There are plenty of reasons for moving out of your current home. Maybe you’re relocating for a new job, to be closer to family, or are just looking for a change of scenery. Whatever the reason you’re ready to move, there’s one question you’re probably asking yourself: Should I sell up or rent my house out?
It’s a dilemma faced by thousands of us every day. Selling a property generates instant cash while renting could bring you a monthly income. But, do you really want to let go of your long-term home where you’ve built memories or take on the responsibilities of being a landlord.
Whichever way you look at it, there seem to be pros and cons for each option, and Unload My Home can help you sort through the options that make the most sense for you and your family.
And if you’re in need of a quick sale for cash, we’ve got you covered there too. Fact is, in some cases, the hassles of renting, tenants, rent collection, late fees, repair work, property taxes, and more simply aren’t worth the hassle. If that sounds familiar, we can get you a fast cash offer on your house ‘as is’.
Whether selling or renting, the aim at the end of the day is to make money. So, how do you decide between renting or selling?
🔹 Should I Rent Vs Sell My House: an evaluation
🔸 Benefits of renting
If you decide to keep your property, you’ll continue building equity by paying down more of the mortgage over time. Plus, if the housing market increases, so will the value of your home.
Renting can turn your property into a lucrative asset. In general, landlords charge an average of 1% of the value of their property in monthly rent. If your home’s worth $250,000, you could look to charge $2,500 a month in rent.
As a landlord, it’s ultimately your tenants that will pay your mortgage payments.
🔸Downside of Renting
If your home needs updating to make it more appealing and suitable for renters, you’re looking at investing a substantial amount of money before even putting it on the rental market.
Cash reserves are essential as a landlord. You need to consider keeping at least $10,000 in reserve to pay for any necessary repairs and maintenance and to cover mortgage payments when the property is empty. Renters remain in the same property for an average of two years, so it’s inevitable that even the best tenants will eventually move out of your home.
🔸 Landlord Responsibilities
But, the main downside of becoming a landlord is actually becoming a landlord. Managing property is a huge responsibility. Not only do you need to keep up with the demands of tenants and maintenance needs, you need to be aware of applicable state and federal laws and regulations concerning rental properties.
It’s possible to employ an agency or individual to manage the property for you. However, this can become expensive which then becomes another expense you need to figure into your monthly costs.
And don’t forget about property taxes, and ‘passive income’ taxes imposed on revenue (more on that later).
🔹 Benefits of Selling
The biggest benefit of selling your home is obviously access to money. With property values increasing between 3.5 and 3.8% year on year, the chances are you’ve already built up a good amount of equity in your home.
Whether you need the cash to purchase your next home, start a small business, or invest in your future, now could be a great time to sell.
🔹 Downside of Selling
If you’ve been in your home for a long time, you have to consider your emotional attachment. Your home is the place you put your stamp on, where you watched your kids grow up, and where memories were made.
However, if you’re moving to a new property, you’ll be moving on and making new memories in your new home. And, it’s worth noting that renting means handing your home over to complete strangers. And, not all tenants will treat your home with the same respect as you.
There’s also the housing market to look at. If it’s weak in your local area, your home could be on the market for quite a while before it sells.
🔹 Taxes Associated With Renting and Selling
Whether you’re renting or selling your home, one of the major things to take into consideration is the associated taxes.
🔹 Is Renting Right for You?
The big question to ask yourself is will your monthly income from renting be enough to cover all the costs associated with managing a rental property? This includes things such as the mortgage, rental income tax, homeowner association fees, property taxes, liability insurance, and any utilities not paid by the tenants.
Will the monthly income be enough to compensate you for being on call 24/7 to deal with tenants’ concerns and any issues that arise? Are you up for the added stress and worry of managing another property, and/or the reduced income when hiring a property management company?
If the answer’s yes and your home is in a desirable area, then renting could be the right choice for you. Before jumping in, be sure to do your research regarding local rules. Consulting with Unload My Home and/or a local real estate lawyer is always advisable. You want to know the rules and regulations around renting a house in your area and what you’ll need to protect yourself as much as you can from liability.
For example, what if a tenant trips and falls on a loose board in your house? You could be held negligent and end up paying six figures in a personal injury lawsuit. Yet another reason why renting isn’t always as lucrative and ‘easy’ as some would lead you to believe.
🔹Final Thoughts on Renting vs. Selling Your House
Renting out your home could be a good long-term investment in your future. However, it has plenty of drawbacks. The responsibility of becoming a landlord is not something to be taken lightly. Between ongoing repairs, renters demands, taxes, and letting agency fees, it could be years before you see your decision paying off.
On the other hand, selling your home is about freeing up the cash now and being free of responsibility. And, there’s no faster way to sell your house in Florida than with a cash buyer, such as Unload My Home. We buy your home as-seen so there’s no need to make the repairs a realtor may require.
For a hassle-free sale in as little as two weeks, give us a call and let Unload My Home take the stress out of renting and selling.