Should I Sell or Rent Out My House? 3 Considerations

Your Finances

Let's start with your financial situation. Review your finances to better understand what's best for you, your family, and your goals. If you need additional funds to purchase a new home, then selling your current property is probably best. That way, you'll have what you need for a new down payment.  If that's not needed, then renting your home could be a solid option, bringing in additional income. That would be the case as long as the rent you’re able to charge is more than your monthly mortgage payment. It's also important to remember rent is considered income and it's part of your overall finances when applying for a new mortgage, and during tax time.

Local Housing Market

Knowing your local housing market is key when deciding whether to rent or sell your home. You may not be able to get what you'd like when renting out your home, depending on supply and demand in your area. Some may think it's as simple as charging at or above your monthly mortgage, but that rate you have in mind may be too high compared to what similar rental properties in your area are currently renting for, so doing the research goes a long way.

The same advice applies when thinking of selling your home. You may think you can list it for a certain price but that might not be realistic given the current market conditions. While it's still a seller's market here in Kitsap County, WA, we are seeing a shift. We are also heading into the seasonal slowdown. Consult a local property manager and a local real estate agent to really weigh your options thoroughly. They can answer your questions and help you make informed decisions that pertain to your area, your property, and your financial situation.

If you purchased your home a while ago and the value has increased a great deal, you may want to take advantage of selling your home now. Also, you may be able to exclude up to $250,000 of capital gains on your taxes from the sale (or up to $500,000 for married couples). It's important to note the home you sell must be your primary residence for at least two of the last five years. There are several important details regarding capital gains tax, so be sure to read up on it before moving forward.

Working as a Landlord

Being a landlord is not for everyone, and many often underestimate the time, energy, and work involved in managing a rental property. If fielding calls, finding good renters, dealing with legal and maintenance issues, accounting, and repairs sounds overwhelming, you may want to sell your home or use a local property management company.  Whether you decide to manage the property or use a property management company, remember that it’s best to keep $10,000 to $15,000 on hand for unexpected home repairs and expenses. As is the case with homeownership in general, you never know when the roof may need to be repaired or an appliance replaced.  If you're in the Kitsap County area and are curious about our full-service property management company, you can check out a list of our services and our client reviews.

Whether you decide to rent or sell your property, we hope you are able to smoothly transition to the next chapter in your life with the resources and support that you need. If you have any questions, feel free to contact us, and best of luck!