The reasons for selling a home are as numerous as properties themselves. Some homeowners may decide to rent their property instead of selling. Here are some pros and cons to consider when deciding to rent or sell your home and don’t forget to consult a financial expert and tax advisor.
Rental pros:
- Waiting game. In the case of a buyer’s market, renting your home may buy you some time until you can sell your property for a better price.
- Cash and equity. Rental income may cover all of your ownership costs, and may even make you a monthly profit, while you are building equity.
- Exemptions. Talk to your tax advisor about whether you are eligible for tax breaks from your rental income and expenses related to home improvements.
- Flexibility. If you are reluctant to sell your home, renting it out allows you to retain ownership.
Rental cons:
- Beck and call. You are the landlord. Be prepared to handle all of your renter’s household questions and problems, no matter what time of day or night.
- Bad renters. Even with the most thorough of background checks (which cost money) renters can damage your property.
- Insufficient funds. Sometimes, the income from your renters is not enough to cover the expenses. Taxes, mortgage, and insurance fees can sometimes exceed the amount you can charge your renters.
- Legal ramifications. If you have particularly challenging tenants and need the courts to get involved, it could be a time consuming and costly process.
This information is courtesy of Century 21 life@home newsletter.
