Did you know that the average American moves over ten times in their lifetime? While there are several reasons that cause a person to relocate, some of them include: marital status, career changes, a growing family, and more. For whatever the reason, you have now found yourself at a point in your life where you need to move into another home.
Whereas most people when purchasing a new home put their current one up for sale, the thought of having some extra income from renting the place out sounds appealing. Before you leap in here are some things you need to consider before deciding whether to rent or sell your home:
First and foremost, you need to determine your personal finances.
If you need the money you will make from the sale of the house to purchase your next one, renting out your property will more than likely not be your best option. In addition, you will also need
to make a list of the expenses you will incur from having a rental property including the mortgage payment, real estate taxes, insurance, and homeowners association fees. HouseLogic has already put together a great resource in their Rental Home Expenses Worksheet to help you make sure you are covering all possible expenses.
Once you have figured out your expenses, you will need to find out if it is possible to make a profit on your rental property. To do so, you will need to research what similar homes in your area are renting for. You can take a look at sites like Craigslist or use this simple tool from Rentometer to help you determine what would be a good amount to charge for rent based on the location and amenities.
The next thing you should take into consideration is the current market value of your
home and projected market values over the next few years. If market values in your area have been steadily rising, you may want to wait to sell the home to make the most profit from the sale. However, if the opposite is happening and market values are on a steady decline, selling the property may be the better option in the long run.
Finally, while most people let financial factors determine whether they will rent or sell their home, don’t forget to take into consideration the personal aspects as well. Renting out your home means that you will now be a landlord and will be held to the same legal standards of one. If an appliance breaks in the home, how are you fixing it? By yourself or do you have a trustworthy person that can take care of it for you in a timely manner? Also, if a tenant doesn’t pay their rent, can you handle evicting them? These are just some of the problems that can arise when taking on a rental property. If you have several rental properties, it’s best to look into a property management company that will take care of the issue of rental properties for you.
For more information on property management companies check out our article Benefits of Using a Property Management Company.
Do you know of something we missed as a consideration or have a suggestion for a future blog post? Be sure to add it in the comments below!