Since the real estate downturn that occurred around 2007, buyers and sellers have been faced with the unique challenges of a complex and evolving market. For those who would like to get out of their current home, the choice between selling the house or just renting it out can be very difficult. Beyond the financial complications, there are the intangibles. Moving out of a house or selling it isn’t all about money. A great many things must be taken into account before you can reach the right choice for you.
Evaluate Your Market
First, as with all real estate transactions a close evaluation of the market is in order. Compare your property to comparable units in the same neighborhood and their rents for the last six months. This will give you an idea of what you may expect to rent the property for, and the demand for such units. Likewise, look at sales price data for comparable units. Take a look at the future as well. The long term outlook for the neighborhood is an important factor. Renting a house out with an eye for selling when the market improves may be a wise choice.
Examine Personal Finances
Next, take a long hard look at your financial situation. This includes an examination of income and expenses and your personal cash flow. Remember that if you chose to rent out your home, you will still incur expenses associated with the property (i.e. home repairs, taxes, insurance, etc). Over time, those can add up; make sure you know what you’re getting into. Also, take some time to consider the emotional value of the home. A family home is often difficult to part with, and while your feelings shouldn’t be the deciding factor, they should be acknowledged.
Finally, prepare the home for sale or rent. Selling a home will necessitate a different set of changes, depending on the agreement with the buyer. Rental homes typically require deep cleaning and painting updates at a minimum. While large scale renovations and improvements may not be necessary, most real estate professionals and property managers recommend doing the minimum necessary to command the highest possible rent. Some homeowners find that engaging a property management company simplifies the ownership of a rental, but such agencies charge a fee that must be considered.
The right decision for your home can be financially beneficial while improving your quality of life. The “sell or rent” decision is a complex one, but a careful and thorough approach can guide you to the right choice.