Analyzing whether to sell or rent your home is a BIG deal…and it deserves careful consideration. Ultimately, the right choice for you depends on your financial situation, goals, and personal preferences. Here is a quick run-down to help you decide:

Renting Out Your Home Might Make Sense If…

You don’t need the funds from your current home to purchase another home
You’re moving temporarily and planning to return to the area
You think your home’s value will drastically increase within the next few years
The rental market is especially hot in your area
You have the time and know-how to screen tenants, manage rent/collections, and make home repairs (or would have enough cash flow to pay for third-party management)
Rental income is part of your long-term investment strategy

Selling Your Home Might Make Sense If…

You need to use the equity from your current home to purchase another home
Rent wouldn’t generate enough cash flow to cover things like vacancies, maintenance, repairs, and landlord insurance in addition to the existing mortgage, taxes, and HOA dues
You don’t want to take on the risks, time commitment, and challenges of being a landlord
You’re uncomfortable with the landlord-tenant laws in your area
A home sale would generate a large profit (and has been your primary residence for at least 2 out of the last 5 years so that you’re eligible for capital gains tax exemptions)
You’re concerned a future recession might negatively impact your finances

Before reaching a conclusion, it’s a good idea to familiarize yourself with the landlord-tenant-law specific to your state (and in some cases, separate relevant ordinances in the city and/or county that your property lies within). You should also do some market research to get a feel for price/condition of similar homes for rent and for sale in your neighborhood.

It probably makes sense to talk with a property management professional and real estate broker to clearly understand what you can expect to net as a landlord or seller. Our brokers are always happy to give honest advice and an accurate home value estimate based on real-life knowledge and market conditions.

Windermere Mercer Island

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2737 77^th Ave SE, Mercer Island, WA 98040 | (206) 232-0446
mercerisland@windermere.com