August 1, 2022
Should I Sell or Rent My Home When I Move?
Are you planning on moving soon? If so, you may be considering what to do with the house you currently own. It basically comes down to two options: selling or renting. Which option will benefit your circumstances the most? “Should I sell or rent my home when I move?” In today’s blog, we will be going over several things you should ask yourself to determine the best route.
Rent or Sell — Do I Need the Money?
The first question you should ask yourself when deciding to either rent or sell is: “Do I need the money?” When most people are looking to move, they usually need to sell their current home to get the funds they need for a new one.
For example, let’s say that Mary wants to buy a home for $300,000 and has $90,000 of equity in her current home. By selling her house and using her profits as a down payment, she can avoid paying PMI for her new house.
Unless you really need the money now, selling your home isn’t always the way to go. You can instead rent your home for a few years. Taking this route makes more sense so that the value of your home can go up. If you do not need cash right now, it may be wiser to rent your home instead.
Rent or Sell — Do I Owe More Money on my Home than it’s Worth?
While this will most likely not apply today since the value of real estate has only been going up (especially here in southern California), it’s still worth mentioning. If you currently owe more money on your home than it’s worth, it might be a smarter idea to rent it out for a while. This will allow you to grow your home’s value and sell it once it’s reached a good deal. The alternative (not so good) route would be to sell your home and continue making payments on something you no longer own—which is no fun.
Rent or Sell — Could I Invest the Cash?
As we previously mentioned before, you may need cash for something like a down payment. However, this may not be the case for you. Maybe you want to invest the cash in something profitable. For example, maybe you have a low-risk investment opportunity that can give you a great ROI. In this case, you should probably sell your home and use the proceeds to grow your wealth.
Rent or Sell — Do I Want to Manage Tenants?
An important thing you need to think about is the actual property management that comes with renting out your home. Think about everything associated with the management of the property. You will have to:
- Make sure the property is cleaned and in good condition
- Market the property to potential renters
- Show tenants around the house
- Write a contract
- Collect monthly rent
- Deal with maintenance and repair issues
- Repeat the process when the tenant leaves
Yes, rental property is a great investment, but it also requires a lot of work. While you can always hire a property manager, just know that your profits will decrease significantly. If you don’t have the time or desire to take on a huge responsibility, it may be best to simply sell the home instead.
So, should I sell or rent my home when I move? The short answer is it depends. If you could really use the cash right now, it might make more sense for you to sell the house. But if you’re willing to deal with the responsibility of property management and don’t need the cash at the moment, maybe you should let a tenant cover the mortgage costs for you as the value of your home goes up. Either way, both routes have great benefits. All you need to do is analyze your needs and goals carefully to determine the best one for you. At Community Mortgage, we can help you analyze both sides and recommend a route according to your specific situation. Let us help you be more confident in whatever decision is best for you. Schedule Your FREE Mortgage Consultation by giving us a call at (619) 692-3630 or clicking here!