You moved into your home a while ago expecting to stay forever—or five years at least. But life situations, ranging from professional reasons to personal relationships, means moving. You are not alone because the average American moves about 11.7 times in their lifetimes.
If you’ve been considering moving on from your current home, you are likely wondering, “should I rent or sell my house?” It’s a big decision you should not take lightly and requires considering several factors.
Many homeowners choose to sell, and others opt to keep and rent out their homes. Reasons affecting the decision include a robust economy and rental market.
There are benefits and drawbacks to renting while waiting out the market. However, the best answer depends on your situation and timeline.
This guide is an overview of some considerations when deciding whether selling or renting your house is right. Both options have their benefits and drawbacks. The issues we outline will help you make a definitive decision.
Should I Rent or Sell My House?
See if you bought your home during a buyer’s or seller’s market.
A buyer’s market favors home buyers instead of sellers. More homes for sale on the market than buyers means the homebuyer gets a property at a lower price. These conditions also contribute to the environment as one of the fastest ways to sell houses in today’s market.
A seller’s market has more buyers than homes for sale. The sellers will often find it easy to sell their properties at a higher price.
The state of the market at the time of a transaction plays a critical role in determining whether renting or selling a house is right for you. A seller’s market offers some profit, while a buyer’s market offers less money, and renting is more attractive.
Benefits of Renting Your House in Today’s Economy
A quiet housing market, inflation, and rising rents make turning your home into a rental property attractive. The key to running a successful rental is great tenants and understanding the current market conditions.
Meeting the criteria means you’re better prepared to reap the benefits of transforming your primary residence into a rental. Here are a few perks:
- Flexibility to sell when the market improves—You might have the option to sell, but the current market conditions aren’t attractive. Instead of selling at a loss, rent out your property until the market improves. The strategy offers you the flexibility to sell and make a profit later.
- Property value appreciation—Renting out your house lets you hold on to it for a profit so you can sell at the right time. The home’s value appreciation rate will vary depending on various factors, including the real estate market. Research the appreciation potential in your neighborhood to see what to expect.
- An option to move back—Staying at your current residence might not be feasible today. When you need to move for a job or other reason, it is nice knowing you still have a place to call home once you return. However, check with the local and state housing regulations and respect the tenant lease agreements.
- Debt paydown—Your rental home allows renters to pay it off for you. The rent may cover mortgage payments, and extra goes into your profit.
Benefits of Selling Your House in Today’s Economy
Still, regarding “should I rent or sell my house?” The second option has its ups. For many people, homeownership is a life goal, and renting puts a stop to that along the way.
However, this assumption is not always helpful when considering the benefits of selling a home in the current economy:
- Lower your housing costs—Selling your home means you’re not responsible for monthly mortgage payments and interest rates, property tax, maintenance costs, replacements and repairs, home inspections, insurance and liability, HOA fees, and property fees and utilities.
- Reduce the risk of unforeseen costs—You avoid unpredictable costs such as adjustable-rate mortgages, appliance upgrading costs, regular repairs, damages due to poor management, and environmental disasters.
- Free up your time—Home maintenance and upkeep can take more time than you can afford. Further, homeownership means shopping for reliable gutter cleaners, contractors, and others.
- Streamline your life—If you feel like your property owns you rather than owning it, selling to cash home buyers in Pennsylvania and moving to a smaller living space will help. Selling provides the timeline and process required to get sorted and remove unwanted items from your new home.
Signs Its Time to Sell Your Home
Each home serves a different purpose in your life. Some are supposed to be a home base for a lifetime, and others only for a few years. For others, the homeowners only want a change of scenery.
Whatever your case may be, know when the time is right to move. Here are two major signs to sell your house.
House Prices Have Risen But Have Now Hit a Plateau
Housing market statistics suggest the industry is unbalanced due to slow buyer and inventory activity. The median listing price is on a below 10% growth rate but is slowing down. The number of listings is also declining, and homes stay longer on the market.
The market conditions mean you should understand there’s a slower activity and set your expectations accordingly. Increase the chances to sell a house fast in Chester by pricing appropriately, preparing the house and effective marketing.
A market that has hit the plateau is favorable for home sellers because of supply constraints and moderate buy demand. Further, it’s better to sell now than later to leverage increased borrowing. However, wait for better conditions if you don’t have to sell now.
You Think You Could Make Some Money
A definite green light to put your home on the market is if you want to make a profit and in a seller’s market.
Contact your trusted local real estate agent to confirm the current housing market. Statistics on year-on-year inventory changes will help you identify the market you’re in. A drop in inventory is a good sign to sell, especially where we buy houses in Philadelphia.
Reasons to Rent Your Home
Renting out property is an increasingly popular investment for Americans. Despite the perceived housing market risk, the outlook is favorable for becoming a landlord.
Here are some reasons for renting out your home.
Rental Demand is High in Your Area
There are several factors to consider before investing in a profitable rental property, but your first choice is a location with strong demand.
Rental demand is the competitive need for rental properties in a specific real estate area. If your home is in a high rental demand area, there is less vacancy risk. The numbers also mean higher monthly rental income and a steady cash flow.
You Want to Own a Rental Property
Have you ever wanted to become a real estate investor or landlord? Get started with a home you’re familiar with. Further, your current home is a better proposition compared to purchasing an investment property at today’s high sale prices.
Owning and running a rental property is an excellent way to diversify a portfolio. The investment also introduces an additional layer of protection against risk as you take advantage of positive rental market swings.
Renting Your Property to Add Money to Your Wallet
The biggest advantage of owning a rental property is the income it offers. Your current home can be a source of recurring income with little maintenance effort.
However, work out the cash flows before renting out your property. The step ensures you factor in all the expenses required. You also want to assess whether numbers offer a consistent passive income. The extra hundred dollars monthly can come in handy in uncertain economic times.
Reasons to Sell Your Home
Selling a home is not always easy. However, it offers many benefits.
Getting More Liquid Cash
One of the best ways to get more liquid cash is by accepting cash offers for your house. Some buyers will offer to pay for homes by making a cash offer instead of financing the purchase through the traditional mortgage process.
Such cash offers are appealing because they close quickly and are less likely to fall through. However, carry out due diligence while dealing with cash buyers. Some employ predatory tactics by offering substantially less money than your home is worth.
You Want to Downsize Your House
Your home may be too big for you now than when you first purchased it. Consider relocating to a smaller, more affordable, and more manageable house.
Downsizing also means you’ll pay lower homeowner costs and mortgage interest payments. It is an opportunity to ease financial pressure and put more money in your pocket.
You Want to Reinvest Profit Elsewhere
Selling your home can help you reach financial goals faster than renting. These goals include putting down the down payment on your next home.
Home sellers realized a 15.8% profit rise in 2022 compared to a year earlier. Further, equity gains have been on a steady rise since 2020. Higher equity means you’ll earn more profit from a home sale.
So, should I rent or sell my house?
The answer requires careful consideration of your current financial status, the local housing market, and lifestyle. Consider the benefits of each proposition and analyze your reasons for wanting to sell or choosing a monthly rent. Talk to a real estate professional as you consider the options available.