Should I sell my residence or rent it out
Many sellers get confused about deciding whether selling or renting out is the better option. Both these options bring along a set of pros and cons depending on your situation. Below, we have listed the advantages and disadvantages associated with both to help you make a choice.
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Renting it out
Renting your house means letting someone live in your home in exchange for rent for a certain period. The property remains yours.
Pros of renting out your house
By renting your house, you will get a fixed monthly income. This money could be used to pay the mortgage for the new house. Moreover, with time, the value of your property will increase, and you can wait till real estate prices are high to sell your home.
If you’re shifting to a different country, renting your home will not only get you a good income while you are away, but you will also have a house in case you decide to move back; by hiring a good agent to deal with the tenants, you would not have to think about these issues while away.
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If the real estate market is going through a downfall and the demand for houses is low, you may not be able to find a good deal or perhaps any deal at all. If you cannot sell your home, the best option is to give it for rent. You will earn a decent return while waiting to get a buyer.
Cons of renting out your house
Renting out your house is not always as desirable as it seems. The most important drawback is that your money remains stuck. You get a huge sum of money to invest or use to buy a new house by selling your home. Before giving a house for rent, you need to make sure it is presentable, and you may have to undergo renovations adding additional costs. Furthermore, dealing with tenants often becomes exhausting. Not only do you have to cope with all the legalities, but you will also have to have negotiations with the tenants and keep constant checks to ensure that the tenants don’t ruin your property. Some tenants fail to pay on time, and if you are in another country, they take unfair advantage of your absence.
There are a lot of tax matters that come along when you give your house for rent, and you must understand them before going ahead with this decision. Besides providing income tax on your rental income, you will also be charged a capital gains tax upon selling the house that is not your main residence.
Selling your house
Pros of selling your house
Selling your property gives you a lump sum amount of cash that you can use to finance your new home or invest somewhere. Furthermore, it helps you from the hassle of preparing rental contracts and dealing with tenants. Neither will you have to bear the maintenance costs of paying mortgages on two houses. The real estate market constantly fluctuates; hence, if it is currently a seller’s market, it is wise to confirm a deal as the market dynamics may change anytime. Read more about Silver City.
Cons of selling your house
It may not be a seller’s market, and selling your house at the wrong time may result in you getting a smaller amount than possible. The property’s value grows over time; delaying selling will allow you to take advantage of the increased prices. Some people have emotional sentiments attached to their homes and may not feel comfortable selling them. Renting instead of selling will make it possible to earn an income without letting go of the house.
Conclusion
Both options can turn out to be beneficial or harmful for different people. Factors such as the condition of your house and the current state of the market determine what option will be helpful. Hence you must conduct proper research before making any decision.
