When you are planning to relocate the choice of whether to rent your house or to sell may plague you.

For most, the decision is simple. Sell the house, buy a home in your new location, and move. Other than the trials of selling and buying, this is a pretty simple decision.

But for some, the question “do I rent or do I sell” may arise when the house does NOT sell, or the home’s market value vs. the amount of the loan makes the decision to sell a tough one.

So how do you decide? What things should you consider?

A big question is financial, and this is a personal choice. Can you afford to handle a mortgage on your old home, buy a new one, and either carry both or supplement, and if you are REAL lucky cover, the cost of the mortgage payment on your old home with the rent? Many cannot afford those kinds of payments.

A sidebar to this issue is the question whether you can qualify to buy a second home in your new location while carrying the mortgage on your old. Perhaps you can, but if you cannot your choice really boils to only renting in your new location, or selling your old home no matter what the cost (or loss).

No one knows where the market will go, and holding on to the home in hopes of prices going up is a risk. That may happen, and you can later sell at a higher price than currently. But it may not happen, or the timing may be lengthy. For some folks it may be better to simply sell now, take a loss, or break even, and move on with your life.

1. When looking at these financial issues a discussion with a qualified mortgage professional is prudent
2. If you are considering renting I would advise talking with an accountant to understand the tax implications of owning a rental (deductions, declaring a loss, later selling an investment property, etc.) that could impact your personal situation
3. If you have a financial planner s/he would be a good person to also discuss these matters with
4. And, lastly, obtaining detailed information on the market value of your home and the overall market conditions is essential so you can make an informed decision – I would talk to several REALTORS if at all possible.

If you are thinking of renting rather than trying to sell, or because you cannot sell your home, there are some issues to consider.

• Potential wear and tear on the house if renters do not care for the home as you would; damages can sometimes be significant and costly
• It would be smart to have someone locally who can manage the property for you, unless you can reasonably get by periodically to check on the condition of the property, but there is a cost to this
• Possible difficulties showing a home to prospective buyers when you decide to sell if tenants are not cooperative – BTW some tenants are terrific about this provided they treated respectfully, notified in advance, etc; others can be troublesome and detrimental to the sale
• Understand the financial implications of rental income, operating expenses (e.g., maintenance, HOA fees) and your taxes, plus the impact of selling a home that has been turned into an investment property (e.g., capital gains taxes).

These are tough choices, and sometimes you are forced into the situation of making one decision or another. Be sure to examine the options that you have and understand the various issues before making a final decision.

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If you need additional information about Carlsbad homes, other nearby communities, or the housing market in general, please contact me by phone or text message at (760) 840-1360 or email me at JDowler@remax.net.