Should I Sell My House or Rent It Out?
There are some factors to consider in each individuals personal situation when it comes to whether you should sell or rent your home out. Some things that might influence your decision would be your current financial state, how the local market conditions are doing and are projected to be, if you want to be a landlord and taxes.
If you are planning to move temporarily for a job, travel or just to try a new location out, it may be best to rent your house out so that you have your home to move back to upon returning. This way you’re not paying sales commissions just to sell your home. If you plan to come back to your current location, it’s best advised to rent out your home for financial profit if you have previously lived in your house for over two years. You are able to rent your house to a renter for up to three years to still have the opportunity to sell the home with no capital gains tax.
If you rent your home out at a higher cost, you can profit enough to cover your mortgage and other home expenses. Every month when your tenant pays rent, your house payments can be covered plus you might have some extra money that could go towards a nice holiday! If you have a lot of expenses such as repairs around the house and mortgage interest, than you most likely won’t have to pay tax on the income received from the tenant. Also, it is possible that you might be able to qualify for more tax deductions when renting your home because it depreciates the value.
If you follow the market and it looks like home prices are going to rise over the next five years, it might be in your benefit to rent it out instead of selling it before it peaks at a higher value. That way you can sell it when the value of the home has risen.
Another perk of renting verses selling your home is that renters are often more lenient on the condition of the home. That is because they know it is not a temporary home for them so they may not be as concerned with outdated fixtures or repairs. However if you’re selling, it will more than likely be an expense to maintain and repair the home since buyers expect better conditions.
However, if you’re upgrading homes, it might be in your favor to sell your current home rather than rent it out. The equity from the sale could help fund the down payment for your new home. This is a good way to have a lump sum of funds.
One thing to consider when renting your home is that you then take on the role as landlord which can be a hassle if your tenants aren’t respecting your home or paying on time monthly. In a case such as this, you would be responsible for evicting the tenant from the property.
There are many personal aspects in an individual’s life that can drive them to go with either selling or renting out their home and it’s imperative to sit with all points to decide what best suits your current situation.
For all your real estate questions please contact Arminé Ghevian at 818-389-4465 or firstname.lastname@example.org