If you’ve decided a move is in your future, the next decision you may need to make is whether you want to sell or rent your current home. It’s an important one, with many competing factors both for and against each option. Here are a few things to consider:
Benefits and Risks of Selling
Selling your home can be appealing if you prefer simplicity and flexibility, but there could also be drawbacks based on your circumstances.
Pros of Selling
- Once your home is sold, you don’t need to worry about it anymore.
- You can use the money from your current home as a downpayment for your next one.
- You can lock in your home’s value (and the profit!) right now.
Cons of Selling
- There are taxes and costs to selling a home that will be paid at settlement.
- Depending upon your profits, there may be tax implications for selling.
- If the market is on the buyer’s side now, you may not make as much money on your home as you want or potentially sell at a loss.
- If you anticipate returning to the area in the future, you may not be able to find a similar home in the same location.
Benefits and Risks of Renting
Being a landlord may never have been your plan, but along with the work comes some benefits that may outweigh the risks.
Pros of Renting
- Income from rent can offset mortgage payments or even return a monthly profit.
- Your home can continue to increase in value while you hold onto it.
- If the market is on the buyer’s side, you can wait for the it to be on your side when you sell in the future.
- If your move is temporary, you can choose to return to your home in the future.
Cons of Renting
- Search for tenants, potentially at the end of each lease.
- May need to get a license or other documentation to legally lease your home.
- You don’t know where the market will be when you choose to sell in the future.
- You are still responsible for maintenance and upkeep, which could require you to hire a property manager
- Selling a rental has added steps to the process.
How Do I Decide?
Each of these considerations and how they are ranked are specific to you and your situation. However, a trusted real estate or financial advisor can help you to determine which is the best course of action to help you achieve your goals.
