Renting Your Home vs. Selling

For years, you wanted to sell your home. You have even purchased a new home already. Perhaps you’ve had difficulty selling the property for various reasons. Or, maybe you have simply changed your mind about selling. Whatever the situation, you have ultimately decided not to sell your house. What will you do instead? You can rent it!

Renting your home ensures that you keep your home as an investment. You can use the money from the rent to put towards retirement, college tuition, or home improvements for your current home. It is a smart financial move for your starter home, and time is on your side to turn a possible lemon into lemonade.

Why rent your home?

Renting your house can be a good financial investment for many reasons, including:

·         The value of your home will go up, especially over the long term.

·         You control your investment.

·         There are tax breaks when you own your home and also when you sell it.

·         You can keep your investment in good condition.

·         You can develop landlord skills.

Advantages of renting your home

You can keep your first starter home and let tenants pay off the mortgage. Meanwhile, its value will increase. This is when you have a great investment. Other advantages to renting your home vs. selling it include:

·         You can get tax breaks from mortgage interest, landlord costs, and property taxes by deducting them at tax time.

·         You can accumulate equity. You can do this in two ways: Paying off your investment from rents, and the value of real estate goes up along with your investment.

·         You can save money for retirement, college, vacations, or home improvements.

Disadvantages of renting your home

Unfortunately, there is a flip side to turning your home into a rental. Before you make the decision to become a landlord of your rental property, you should consider the following:

·         Real estate is a long-term investment. It will take you at least five years to build a good level of equity. In order to reap the benefits you must be patient and stick with it.

·         Not everyone is cut out to be a landlord.

·         You might decide to move in a few years and not have time to build equity.

Selling after your home has been a rental

If you decide to sell your house after you have rented it, you should know that usually you can sell your home as a primary residence if you live in it for two of the last five years. This rule is tailored for those who have a hard time selling and have to wait for the market to change.

Whenever you do decide to sell, you will definitely need to know the value of your home so that it can be priced accordingly. In fact, you should know your home's value while you're renting it as well. Find out the worth of your home with a free home valuation report from Neighborhood IQ!