Should I Rent or Sell My House?
Do you own a home you no longer want to live in? Perhaps you own a rental property and are unsure whether continuing to rent it is worth the time, effort, or financial investment involved? Then you’ve probably considered selling your house. But selling is a major decision, and it may not be right for everyone.
If you’re curious whether renting or selling your house is the best option for your situation and needs, read on to learn what you should consider to make your decision.
Will Your Rental Generate Solid Cash Flow?
Whether you’re already renting the house or are considering doing so, the first thing you’ll want to think about is whether the property will — or has the potential to — generate appreciable cash flow. To figure that out, you’ll need to:
- Write down the amount of rent you’d like to charge or are currently charging.
- Subtract all the expenses you’ll be responsible for paying. These typically include major property repairs, your mortgage, homeowners insurance, property taxes, property management (if you do this), HOA fees, and lost revenue as a result of vacancies.
What do you come up with when you run the numbers? Is your property currently making a profit? Does it have the potential to in the future? If the numbers don’t line up the way you want or need them to, it’s probably in your best interest to sell your house.
What Would the Taxes on the Sale Look Like?
If you want to sell your house, consider how much of the sale money you’ll have to fork over in taxes. If you’ve lived in the property for at least five years, you can exclude up to $250,000 in capital gains tax when you sell. If you’re married and file jointly, that number jumps to $500,000.
If, on the other hand, you haven’t lived in the house for at least five years, you’ll have to pay capital gains taxes when you sell. Those taxes can eat up quite a bit of your profit if you have considerable equity in the house or if the market is remarkably high. Weigh the costs against the benefits and make a decision from there.
If You Sell Your House, What’s Your Projected ROI?
If you sold your house within the next couple of weeks, would you make a decent profit? More importantly, if you sell with a realtor, will you make a good profit minus the fees and closing costs you’ll inevitably have to pay? Think about the expense involved in selling your home on the open market before you decide to list it.
If you’re set on selling, it may be in your best interest to take another avenue — selling to a home investor — rather than forking over so much money in associated fees.
What Does the Real Estate Market Look Like in Your Area?
If the market is super hot, and you’ve owned your property for years, it’s probably in your best interest to sell. When properties are closing for thousands of dollars more than their listing price, or it’s a seller’s market in general, you could walk away with a handsome profit on your sale. To accumulate that much profit from a rental would take you years, so if you’re not keen on waiting, selling now is a good choice.
Do You Actually Enjoy the Landlord Life?
Bottom line: Do you like being someone’s landlord? If you’re not a fan of dealing with tenants, don’t force yourself to do something you hate! You’ll suffer, your tenants might too, and resentment is inevitable. If you’re considering selling your house because you seriously don’t like renting it (or the idea of doing so), do yourself a favor and sell your property instead.
If you’re seriously considering selling your Cleveland-area home, selling to a home investor is a simple, straightforward, and affordable way to get the job done. At We Buy Houses Cleveland, we’re more than happy to help you determine if selling your home is the best decision for your needs! Our home investors are passionate about helping local families make the best real estate decisions to achieve their financial goals because, at the end of the day, we’re striving to build better communities, just like you. To learn more about how we can help you sell your house, feel free to give us a call today at (216) 303-8558 or request a no-obligation cash offer, and we’ll be in touch right away!