When deciding you want to move out of your current home, the question often comes to mind: "Should I sell it or rent it out?" In our opinion, it's often better to sell the property. Here's 2 reasons why:
- Look at the numbers: You need to make sure your principal payment is no more that 60%. If you think you can rent your home for $1000 a month, your principle payment should be around $500, $600 maximum. You need to account for expenses such as taxes, insurance, maintenance, repairs, vacancy, marketing, and managing.
- Money in the bank: Prepare to get your home back in much worse condition than when you started renting it out. We've seen homes that need as much as $15,000 worth of repairs. Even if the repairs aren't that expensive, you're unlikely to get as much as you would have if you sold it years ago.
All in all, it's better to sell your home than to rent it. Tenants are unpredictable and can often cause more problems than it's worth. However, if you have the right financial situation and a temperament for renting houses, there is no reason you shouldn't.
Renting isn't for everyone, but if you are up to the challenge you should do it. If you want any further advice on the issue, we'd be happy to talk. Give us a call or shoot us an email for some tips on your particular situation.
