Would you like to go out of your comfort zone? Got a new job somewhere else? Dreaming of relocating? Or thinking about starting up a business? You always dream of building your home and now you have it. But, you still want more. Fortunately, you have found a great idea that you believe will work and prosper. Now, the challenge is, would you sell or rent out your current home?
Let’s find out!
Do I have to rent out my house?
If you are thinking of renting out your place, you have to consider a lot of things. By keeping your house you are letting it increase its value as time goes by. If your house is currently or still on the mortgage, you are turning it from a liability to a profitable asset. And as time goes by you can add more houses or properties and continue the rental business.
However, is this the right way to do to your home?
Do I need to sell my house?
You have found another way of making a profit by selling your home for more than the price you bought it and it’s true that you can gain profit from it. You can use the money to pay for your new home’s mortgage or equity and take extra cash to start renovating and do some changes and sell it at a higher price.
The same question goes, is this the right way to do to your home?
Let’s take a comparison between rent and sale:
Why rent?
- You can make a profit.
- Continuous monthly cash flows.
- You are renting it out because the location has a lot to offer: Near universities or schools, near offices, and there are a lot of tourists.
- The house amenities are preferable and almost complete.
- The neighborhood is good.
- Rentals are in high demand
Why selling?
- The seller’s market is up!
- You can use the money to pay for the new house.
- If the neighborhood is not likely for rental business.
- The house value is much higher enough to sell.
- You need a smaller house or a bigger house.
- You don’t want to become a landlord
Why not rent?
- Costly maintenance and repairs.
- Vacancy due to low rent market
- Delayed payments from the tenants.
- Demanding tenants/uncredible tenants.
- You need an adequate cash reserve.
- Needs a lot of work before renting out.
- Lots of equity.
Why not sell?
- You can’t let go of the house because it has sentimental value to your family.
- Mortgage rates are high for new home purchases.
- The home selling/buying market is weak.
Everyone’s situation is different, but profitability is the most important factor. Renting out your property is a great way to become a landlord and have a passive income. In the event you do not wish to manage the property but need cash to acquire a new home, you may wish to sell it. When facing some type of dilemma about your current home, remember to weigh all the factors that will benefit you the most.