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To Sell or Not to Sell Your Home? Considering The Choice Between Selling or Renting Out Your Property

To Sell or Not to Sell Your Home? Considering The Choice Between Selling or Renting Out Your Property

You can’t predict the future. When you bought your home, you likely envisioned yourself there for a few years. But now, perhaps you’ve suddenly found yourself facing a relocation, a new job opportunity, a growing family, or any of life’s unpredictable events. You have to decide the best course of action: what should you do with your house? Should you sell your home? Or should you rent it out? 

As with many things in life, the answer is it depends. Whether or not this is the right choice for you will hinge on a variety of factors, life goals, financial situations, and more. So here’s a short list of the top considerations to help you make the decision. 

What Does the Housing Market Look Like in Your Area?

This is a good starting point. By understanding the state of the real estate market in your area, you’ll get a better idea of what your options are and where you stand as a potential seller. 

Since the pandemic began about two years ago, the real estate market has certainly caught many by surprise. In some cities, it was outright unpredictable. The market is always changing and subject to volatility depending on what’s happening in the wider economic sector. 

In January of 2022, for example, The El Paso Times reported that the real estate market in the county rose year after year. The median sales price for a single-family home in El Paso County in October 2021 rose 15.3% as compared to October 2020. 

Of course, the market fluctuates so obtaining a comparative analysis from a real estate expert can be the way to view the most accurate data. 

Other Considerations for Selling 

While there is no black and white playbook, selling your home might seem the right choice if the following criteria apply: 

It’s a “Seller’s Market”

A seller’s market refers to a local market where the inventory is low and the demand is high. In other words, you have a lot of interested and hungry home buyers and house hunters looking at a limited number of properties. This makes your property more attractive to more buyers. In some instances, if you have a seller’s market on your hands, you may consider selling as a viable option. 

The Rent Does Not Match the Home’s Value 

For some high-end homes, the return on rent diminishes with the higher rent prices. This is known as the Gross Rent Multiplier and refers to the ratio of the property’s market value over the annual gross rental income. If you’re not able to charge enough rent to cover the necessary mortgage expenses, it might not be financially worth it to rent it out for a long period of time. 

You Don’t Have Cash to Cover Vacancies or Expenses

Renting a home will come with inevitable maintenance costs. In the event that your home sits vacant for a while or requires maintenance expenses, you should have enough cash on hand to cover this without putting yourself in a pinch. If there is no rainy fund, selling your home might help remove that burden off your shoulders. 

You Have Equity and It Can Help Your Next Move

If you’ve built up some equity on your home, you can use some of that to help you find your next home and finance the down payment. If you’re relocating, that means you are likely to look at buying a home in your new city or state. Cashing in on the equity you’ve built on your home can give you some wiggle room for your next downpayment. 

You Don’t Want the Hassle

Being a landlord can be a hassle. There’s a lot that goes into it and a lot that can go wrong. From getting bad tenants to finding yourself with a vacant home, becoming a landlord is a bit of a commitment. If you’re going to work with a property management company, then be aware of how that cuts into your profits and how reputable and trustworthy the company is. 

Why Renting Might Be An Option For You 

The other side of the equation requires some careful calculation as well. Renting out your home can be a lucrative endeavor and provide a steady flow of income. The Covid pandemic, however, had a lot of landlords nervous after the long rent moratoriums in some areas. So here’s why renting might be a good option for you. 

Demands for Rentals are High

If you live in a college area, popular neighborhoods, or newly developed neighborhoods, this may be an area of high demand. If this is the case, it might prove that you won’t have a hard time finding good renters. 

You Plan on Returning to the House

Whether it’s a personal attachment or a hunch that you’ll be back; if this is the case, renting your home might make sense. If your future suggests that you’re likely to return or plans can change quickly, keeping the house as a rental might produce steady income until the future possibilities settle. 

Find the Right Advice for Your Situation 

In the end, the decision will likely come down to numbers or emotional attachments. A real estate agent will likely advise you to drop the emotional attachments and think in numbers and calculations, but that’s just not the way it always works. 

Ready to Sell? Find the Right Home Selling Team Today!

If it’s time for you to sell, one of the most important factors in a successful sale is how quickly and swiftly it happens. Here, at the Brian Burds Home Selling Team, we make it happen. If you have questions about whether selling your home is the right option, give us a call. 

Want to learn more about how we can help. Connect with our home selling team today. 

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Otto

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