There comes a time when nearly every homeowner is ready to upgrade to a larger home or relocate to an area that is more accommodating to their lifestyle and future goals. In most cases, homeowners have built equity over the years and the funds they’ll gain from selling will help cover a down payment and associated costs to purchase a new home.
Depending on the situation, some homeowners may choose to keep their home as a secondary rental/investment property.
If you’re considering selling your home but you’re unsure of what option is best for you, asking yourself a few questions may help bring some clarity to the decision that best fits your unique situation.
Is there any chance you’ll move back?
Relocating for jobs, military service, or other circumstances could mean a temporary living situation is in order. If you’re unsure whether your new home will be a permanent location or predict you’ll be traveling back often, keeping your home may turn out to be a smart choice.
Converting your home into a rental property can provide extra income each month. In addition, you’ll have a home available in the future if you decide to move back or anticipate yourself traveling back frequently.
Can you act as a landlord?
If you are already employed, keep in mind that becoming a landlord is similar to taking on another full-time job. Renting your property will bring in supplemental monthly income, but it also requires a decent amount of additional responsibilities. Consider things like:
- Advertising vacancy
- Scheduling showing to potential tenants
- Background checks
- Credit screenings
- Hiring lawyers to create leases and contracts
- Collecting rent on time
- Costs associated with damages, repairs, and regular maintenance
Do you anticipate changes in property value?
Before you decide to sell your home, it’s a good idea to research the future projected property value. If your area is forecasted to be a hot market in the future, it could be a wise financial decision to hold onto the home. Property values are a guessing game, but you can consult a real estate professional to help determine property value in the future.
Does it fit your finances?
Additional income from renting may seem like an easy way to pocket extra cash. However, becoming a landlord requires many expenses—some predicted, some not. Renting a property could cost property taxes, landlord insurance, utilities, homeowners association fees, unforeseen repairs, legal fees, and mortgage payments when the home is vacant.
When it’s time to move, it can be difficult to decide to rent or sell your home. To help make the decision easier, be sure to thoughtfully consider the pros and cons of each option so you can easily narrow down the choice that’s right for you.
When you’re ready to sell your home, check out our ebook on how to prepare your home.