Should You Sell Your House or Rent It Out? Here’s How to Decide

When it’s time to make a move, one of the biggest decisions you’ll face is what to do with your current home. Should you sell it and use the equity to fund your next chapter, or keep it as a rental to build long-term wealth?

According to recent data from Zillow, more homeowners are exploring the idea of renting out their homes instead of selling. Two-thirds of sellers (66%) considered renting before listing, with nearly a third (28%) taking that option seriously. That’s a notable jump from 2021, when fewer than half of sellers (47%) explored the rental option.

This rising trend begs the question: Which choice is right for you? Let’s break it down by answering some key questions to help guide your decision.

Is Your Home Ready to Be a Rental?

Not every home is cut out for life as a rental property. First, consider the logistics. If you’re moving far away, managing repairs and upkeep could quickly turn into a headache. Additionally, ask yourself:

• Is my neighborhood in demand for rentals?
• Would my home need significant repairs or upgrades to attract tenants?
• Does this property align with my long-term investment goals?

If managing repairs or dealing with tenants seems overwhelming, or if your home requires substantial work before it’s tenant-ready, selling may be the simpler and more practical route.

Are You Ready to Be a Landlord?

Let’s be honest—being a landlord isn’t all passive income and sunshine. While collecting monthly rent sounds appealing, it comes with its share of responsibilities.

Landlords have to handle maintenance issues, late-night calls, and unexpected repairs, like broken HVAC systems or leaky pipes. There’s also the risk of missed rent payments or tenants breaking their lease, which can bring financial strain and stress.

Redfin explains it well:
“Landlords have to fix things like broken pipes, defunct HVAC systems, and structural damage, among other essential repairs. If you don’t have a few thousand dollars on hand to take care of these repairs, you could end up in a bind.”

Becoming a landlord is a commitment—one that requires time, patience, and financial preparedness.

Do You Fully Understand the Costs?

Before diving into the rental game, it’s essential to calculate all the associated expenses. Many first-time landlords underestimate the true cost of maintaining a rental property. Here’s a quick breakdown of what to consider:

• Mortgage and Property Taxes: Even if the rent doesn’t fully cover these expenses, you’ll still be responsible for paying them.
• Insurance: Landlord insurance costs about 25% more than traditional homeowners insurance, but it’s essential for protecting against damages or injuries.
• Maintenance and Repairs: Plan to spend at least 1% of your home’s value annually for upkeep—and even more if your home is older.
• Tenant Acquisition Costs: Advertising and background checks can add up, especially if you’re between tenants.
• Vacancies: If your property sits empty, you’ll lose rental income while still covering the mortgage and other costs.
• Management Fees: Hiring a property manager to handle tenant issues and maintenance can ease the workload, but it typically costs around 10% of the monthly rent.
• HOA Fees: If your home is part of an HOA, those fees will also need to be accounted for.

When you add it all up, the question becomes: Is the rental income enough to offset these expenses and provide meaningful returns?

The Bottom Line | Should you Sell or Rent it Out?

Ultimately, the decision to sell or rent your home comes down to your financial goals, lifestyle, and comfort level with managing a rental property. Selling can provide immediate funds to put toward your next home, while renting offers the potential for long-term wealth-building—but also comes with added responsibilities and risks.

If you’re weighing your options, let’s connect. I can help you assess your home’s value, potential rental income, and what makes the most sense for your unique situation. Whatever you decide, having an experienced real estate advisor by your side will ensure you’re making a fully informed choice.

Thinking about selling or renting? Let’s talk today!