Maybe you’ve finally gotten that promotion at work—but it requires you to transfer to another city. Or your family situation’s changed and you need a larger/smaller home, or you need to care for a relative in another state. Or maybe you’re just ready to retire to the mountains.
What should you do with the house you’re leaving behind—rent or sell it? Here are 3 situations in which may be better for you to rent out a property rather than sell.
1. You’re leaving the area temporarily
Perhaps you need to leave the state for a couple of years to pursue graduate or doctoral education. Or maybe your company’s transferring you to another city (or even another country), but only temporarily. You probably don’t want to get rid of your home; you’ll want something to come back to when you return.
If this is the case, renting may be a great option for you. You don’t run the risks associated with leaving the home vacant, and you can ensure your home is cared for while you’re gone. And a good property manager can keep an eye on things and make sure the home and yard are maintained to your standards. If you have a mortgage, you’ll still be making those monthly payments, in addition to the rent you’re paying in your new location. Rental income can help you bridge that gap financially.
2. You don’t have time to prepare the house for market
Sometimes you don’t have a lot of heads-up before you have to move—especially when you consider the time-consuming process of selling a home. There are so many important details to take care of before a move, and you might not be ready to throw real estate sales into that mix quite yet. You can buy yourself time—and some measure of sanity—by renting out the home temporarily. It’s easier and faster to prepare a home for the rental market, and it will allow you to continue to get a return on your investment during the interim. Then when you’re more settled, you can find a realtor and begin the process of putting your house up for sale.
3. Selling might not be the best financial option
Perhaps you’re ready to move, but you want to wait until the market changes before selling so you can get a better value for your home.
Renting allows you to hold out for a more favorable market while also making money back to help cover mortgage payments.
Or maybe you’re in the difficult position of having a loan that’s “underwater”—that is, the amount you owe on it is greater than what the property is actually worth. Selling an “underwater home” can be very complicated, and you will most likely lose a good amount of your investment. There aren’t many easy solutions to this problem (the best advice is probably just to stay in the home if you can).
But if you have no choice but to move, rent can help cover the monthly payments on a house that you won’t be able to sell anyway. It’s unlikely that the rent will make up for the difference between what you owe and the home value, but at least you will be getting some income to help cover costs so you won’t fall behind.
Whether you want to rent or sell your home is up to you, but in some cases renting just makes better financial sense. If you’re interested in renting out your home but don’t know where to start, give the PM People a call. We can help you prepare your home, find tenants, collect rent, and make sure your home is well cared for while you’re away.