RMB Luxury Real Estate

For Sale Or Rent

Rent Your House or Sell It?
Which of these options is best will depend on some factors. You should consider each of them, and weight them against your personal preferences, to determine which is best for you.

Things to Consider About Renting Your Home
1. Will renting my house be profitable?

You need to know if renting out your home will generate positive cash flow, or if it will slowly (or quickly) suck you dry. The way you determine, this is to add up all the expenses of renting out the home and subtract them from the money you will make from being a landlord (and the tax breaks you will get).

Expenses when renting a home:

Mortgage – calculate both the principal and interest into the equation.
Insurance – Almost every year insurances rises. Keep this in mind.
Repairs – repairs are almost a certainty. Remember Murphy’s Law.
Taxes – In most areas taxes don’t go down. If you’re looking for pro moving help in, check out movers okc.
HOA fees – this may or may not apply to your circumstances.
Management fees – (if you hire a property manager).
Vacancies – don’t expect to maintain full occupancy the entire time.
Commission – are you going to be paying a real estate agent to rent the property?
Advertising – if you are renting your property without using an agent don’t forget about advertising expenses.
Miscellaneous – don’t forget about other smaller expenses like credit checks on tenants.
Your expenses may vary, and keep in mind that you can find rental calculators that are much more sophisticated than this simple method.

You will have to do some educated guesswork on what your rental income will be. You can look at rental sites and get a general idea of what rent is in your area. Consulting a local real estate agent who handles rentals would also be prudent.

You should also consider long-term rent prices. Will they go up, or down? In most places, rental prices have been going up much like real estate values. Most people who are trying to decide between renting or selling a home are looking to at least have some positive cash flow. Will this be the case while renting your home?

2. Are you okay with being a landlord?

Pros and Cons of Renting vs Selling a HomeRental ownership is often stressful because you have so little control over what tenants do in your home. You may get great tenants that pay rent on time and respect the property. Or you may get tenants that never pay rent on time and wreck the place.

Even if your tenants are decent, you will still deal with the stress of needing to answer their phone calls, keep up with maintenance, etc.

You can always hire a property manager, which if you have a good one makes your life much more comfortable. But there is a cost (usually about 10% of your rental income).

Even if you get the best tenants, you can expect that you’ll probably need to do some painting and maybe carpet replacement when they leave. It is quite unusual that a tenant will maintain your home as you would.

Check out these great tips for being a landlord if this is the way you are leaning.

3. Are you coming back?

If you are relocating, renting can provide some security because you know you can come back to your home. Selling a house and then buying another home incurs costs, so it may be cheaper to rent out your house and move back in when you return.

Quite often folks who are not quite sure where their life is taking them will hold onto their property. Renting allows them to do that while keeping the option open to selling in the future. Sometimes the choice to sell or rent a home isn’t just about finances but of life decisions.

4. Is the market going up in the future?

Some housing markets seem to be almost guaranteed to get stronger in the next few years. If you are in such a market, and you feel like there is a good chance your home will increase in value significantly, then renting will let you keep it, pay the mortgage and realize a bigger payday down the line.

Maybe there are home improvements that you know you’ll need to make but don’t have the money right now? If this sounds like the case, renting could be a good option. Renters are not like buyers in the sense they will be accepting of specific improvements that need to be made. Buyers, on the other hand, can often be pickier.