Should You Sell Your Home or Rent It Out?
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Should You Sell Your Home or Rent It Out?
Selling vs. renting out your home: Which is better?
A client of mine was debating whether they wanted to sell their home. Here'sHere's what I suggested they do.
A client of mine was getting ready to move out of town and asked me if they should sell their home or rent it out after they moved to generate some passive income.
This client was moving to Florida and had owned their home for about seven years.
Each situation is different and could require a different answer, but I usually like to ask a few questions first to determine which option is best.
These are questions like:
Do you ever intend to come back to this area?
How long do you want to hold onto the property?
Have you ever been a landlord before?
They are more prepared for the possible outcomes if they have been a landlord before.
It usually goes one of two ways when renting out a property. Either you have perfect tenants and no problems or problem tenants that drive you crazy.
Owning real estate is a great way to build wealth, and I am a landlord. However, I'veI've either had a great experience or a terrible one.
Tips For Deciding Between Selling vs. Renting Out
Consider Your Long-Term Plans
The decision to sell or rent your home should align with your long-term plans. Ask yourself if you ever intend to return to the area where your property is.
If you need more certainty about returning or envision a permanent move to your new location, selling your home becomes more attractive.
Additionally, consider how long you're willing to manage the property and deal with potential tenant issues. Being a landlord demands time, effort, and sometimes unexpected expenses.
Selling may be better if you need to prepare for long-term property management.
Evaluate Your Risk Tolerance
Real estate investments, whether through renting or selling, come with inherent risks. Understanding your risk tolerance is crucial in making the right decision.
Renting out your home involves uncertainty, as tenant behavior and market fluctuations can impact your returns.
On the other hand, selling means locking in your gains in the current hot market but forfeiting potential future appreciation.
When it comes down to it, though, this is the first time I have seen a market like this in the last ten years for sellers. It is better to consider selling now, but we won't know until we sit down and determine your goals.
All these factors should matter when deciding to sell or rent your home. If you have any questions about your situation or anything else about real estate, don't hesitate to contact me at (703) 346-2776 or Dan@greetingsvirginia.com.