If you are thinking of selling or leaving your old place behind, to move to another home, or maybe downsize, or even relocate, then you probably have a big dilemma on your mind. Should I rent, or should I sell my property?
As with all big decisions in your life, there is no easy answer to this one. Both of these options have their advantages and possible drawbacks. However, you must carefully weigh your decision before making a final choice.
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So, let’s see what the pros and cons of both renting or selling your property are.
Will it be profitable?
You have to know that this is a double-edged sword. You will either make a profit, or this move will suck your dry. However, the only way to determine this is to calculate all your costs of renting and subtract them from the cash you will make as a landlord.
Considering each property is highly individual, and they all have various expenses, you should pay attention to the following things:
- HOA fees
- Management fees
Are you comfortable with being a landlord?
Keep in mind that renting a property is often a stressful job, and you’ll have no control over things tenants do in your house. You might have excellent tenants who pay rent on time and take care of your property, or you might find tenants who are disrespectful and never follow the agreement you made.
Even if you are dealing with decent people, you still need to meet their needs, and maintain the property on a regular basis.
Do you plan to return?
Whether you are moving to another city or relocating to another state, renting can offer you some type of security. In this case, you can always return. Selling and then buying a new house will only increase the costs.
In that case, renting allows you to postpone big life decisions for another time, and if you aren’t sure what to do, then this comes as an excellent decision.
Think about the taxes
If you are lucky enough to generate substantial cash flow, then don’t neglect the taxes. Like with any other income, you will be taxed immediately. However, nowadays, you can use many deductions which can help you decrease the costs.
You get to walk away
This is simply one of those burdens you want to take off your chest. For many people selling and walking away is an easy way to solve their issues. Even though this process might come with a lot of stress, and there will be some work involved, when it’s over, you can just move on.
You can escape a dropping market
The real estate market can be a bit unpredictable, and prices can significantly drop in a matter of days. If you think that your real estate market is going down, then selling is a smart move. You get to avoid all the risks, and simply move on with your life.