When people decide to pack up and move from a house, they often times do not stop to consider renting their home instead of selling. Yes, sometimes renting out your home is not an option, which can be the case if you require the capital from the home to fund your future endeavors. Also, banks sometimes will not give another loan to somebody who has an existing mortgage on a property. However, in the case that tenants are lined up and financial stability can be proven to the bank, renting your house can be a lucrative option.
Let’s take a moment to look over the benefits of renting versus selling:
Selling Your Home
If various other homes in your area are selling well and at a good price, then selling your home could be a great way to make money faster than you would after years of renting.
Selling is a one time, guaranteed financial gain. When compared to renting, selling is much more definite, and can help you avoid years of sporadic payment increments, which are not always a steady income.
Being a landlord requires time and effort, and is considered to be a long-term commitment. This means the lengthy commitments account for managing the property as well as the tenants, but also the mortgage remains as your responsibility.
Renting Out Your Home
Renting can be a great way to enhance your current income, and can usually be considered steady and reliable.
If the real estate market is at a low, this can be good for renting for two reasons. The first reason is that if you sell when the market is at a low point then you may not be getting the maximum value for your home. The second reason is that more people will be looking to rent during a downturned economy.
If house prices in the area are at a gradual rise, it could be beneficial to rent your home until you believe that you can sell it for maximum value.
Over time, rental property depreciates and will lower the taxable income. In most cases this has little to do with the actual property value and boils down to making money from rent and not having to pay taxes on it, then selling the property later for a decent sum of money.