Should You Rent Out or Sell Your Home In Today’s Market?

By Linda Yaffe

Moving does not necessarily mean selling your house nor is selling your home always necessary for affording a new home. For various reasons, some homeowners decide to rent out their homes instead. There are three key situations that may make renting your home out a more viable option selling it.

1. Investment Property- The earning potential of a smart investor is extremely high, because unlike nearly every other type of investment, real estate does not typically decrease in value. Renting your property can allow you to maintain a positive cash flow on the home while the value increases.
2. Short-Term Move- There are many situations in which home owners will only be relocating for a year or two due to work assignments or perhaps to pursue a graduate degree. Other situations may involve an emotional uncertainty of a new location and maintaining home ownership provides security in the ability to easily return.
3. Financial & Market Status – Sometimes, a seller is unable to sell at a price deemed acceptable due to current market conditions or their individual mortgage situation and the owner wants to hold on to the property while the owner works on his financial situation or the value of the property increases.

Whatever the reason, there are many cases when renting out your home just makes more sense. Once you make the decision to rent out your home, you should also determine if you could benefit from the services of a property manager. There are three of reasons why you should consider property management:

1. You are inexperienced and have never owned an investment property before and are unfamiliar with the many aspects of owning a rental property.
2. You do not have the time nor want to be the direct contact for the tenants for rent collection, periodic property inspections, repairs and, in worst case scenarios, eviction proceedings. 
3. You are not living local to the rental property.

The costs to hire a property manager are much lower than you might think. You can also deduct much of the out-of-pocket expenses related to owning and managing the property. You will want to consult with a tax advisor for more specific information on deductions.