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The Yankee Express

Should you sell your house or rent it out?

Mark Marzeott

When you’re ready to move, figuring out what to do with your house is a big decision Today, more homeowners are considering renting their home instead of selling it. Recent data from Zillow shows about two-thirds (66 percent) of sellers thought about renting their home before listing, with nearly a third (28 percent) taking that possibility seriously. Compared to 2021, when fewer than half (47 percent) of homeowners considered renting before selling, it’s clear this trend is on the rise.
So, should you sell your house and use the money toward your next home or keep it as a rental to build long-term wealth? Let’s walk through some important questions to help you determine the right path for your financial and lifestyle goals.   
Is your house a good fit for renting? Before you decide what to do, it’s important to think about if it would make a good rental in the first place. For instance, if you’re moving far away, managing ongoing maintenance could be difficult. Other factors to consider are if your neighborhood is ideal for rentals and if your house needs significant repairs before it’s ready for tenants. If any of these situations sound familiar, selling might be a more practical choice.
Are you ready for the realities of being a landlord? Managing a rental property involves more than collecting monthly rent. It’s a commitment that can be time-consuming and challenging. For example, you may get maintenance calls at all hours of the day or find damage that needs to be repaired before a new tenant moves in. There’s also the risk of tenants missing payments, not taking care of your property or breaking their lease, which can add unexpected stress and financial strain. Landlords have to fix things like broken pipes, temperamental HVAC systems, and structural damage, among other essential repairs. If you don’t have a few thousand dollars on hand to take care of these repairs, you could end up in a bind.
Do you understand the costs? If you’re considering renting primarily for passive income, remember, there are additional costs you should anticipate. You still need to pay your mortgage and property taxes, even if the rent doesn’t cover all of it.
Insurance, landlord insurance typically costs about 25 percent more than regular home insurance, and it’s necessary to cover damages and injuries. 
Maintenance and repairs, plan to spend at least 1 percent of the home’s value annually, more if the house is older.
Finding a Tenant: This involves advertising costs and potentially paying for background checks. Vacancies, if the property sits empty between tenants, you’ll lose rental income and have to cover the cost of the mortgage until you find a new tenant.
Management and HOA fees, a property manager can ease the burden, but typically charges about 10 percent of the rent. HOA fees are an additional cost too, if applicable.
To sum it all up, selling or renting out your home is a personal decision. Make sure to weigh the pros and cons carefully and consult with professionals like those at The Marzeotti Group or another trusted real estate professional so you feel supported and informed as you make your decision.