When should a homeowner rent his home
rather than sell?
Although the US economy and the housing market seem to finally be on an upward trend, we are still recovering from what was one of history’s nastiest and most volatile recessions. First-time buyers are still finding it difficult to get a good rate on a mortgage and many people are still struggling to sell their homes.
Because of this the question arises for sellers; “Should I sell my Louisville home or should I rent it?”
Now, this poses many potential benefits to selling in a bad market but also many potentially devastating risks.
Rent vs. Sell: Tale of the Tape
By renting out your house, rather than selling, you could continue to pay off the mortgage with the monthly rent you receive and then wait until the housing market has improved to sell up. With first-time buyers struggling to get a mortgage there are many people looking to rent and so this could be the perfect solution.
However, if you are thinking about renting rather than selling you should be aware of the potential risks. Firstly, you may wait an extra year to sell only to find that your property has decreased in value during that time and end up with less money than if you had not rented. Secondly, you will have to not only find tenants but reliable tenants who are definitely going to pay the rent and not damage the property. You can cover yourself with Landlord Insurance but you may still have to deal with the issue of bad tenants.
Finally, renting a home can be like having a second job. What with property maintenance, rent issues, property disputes and reference checks you are sure to be busy if you decide to rent out your property rather than sell.
If you find yourself struggling to decide whether to rent or sell you should always talk to a real estate expert who can walk you through the options and issues in a simple and clear way.
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