One option many home sellers don’t consider is renting out their old home instead of selling it. There are actually quite a few circumstances where this approach may be the best one. Below are five reasons you should rent out your old home rather than selling it.
It Gives You Passive Income
One of the best reasons to rent out your old home is that it provides you a passive source of income. If you have retired and moved into a more senior-friendly home, for example, that additional income could be most welcome. There are also deductions landlords can take, which will save you money on your taxes. Be sure to accurately calculate your expected return on investment.
You Have the Option of Moving Back
When you still own your old home, you have the option of moving back in. This can be an excellent arrangement if you are unsure a job in a new city will last. It leaves you with a failsafe. If you were in love with your previous home, this option leaves the door open for returning if you want to live there again someday. Of course, with tenants living in the home, you should expect some wear and tear.
A Poor Selling Market
Another reason you may want to rent out your old home is if that area is currently a buyer’s market. You may wish to sit on your old home for a while longer until you can sell it for closer to what you paid for it. If you are having trouble selling your home or want to wait until prices go back up, real estate companies like the Dee Evans Group can list your property for rent instead.
You Want to Start Investing in Properties
There’s no better way to begin investing in property than by renting out your first home. If you choose to get into investing this way, you won’t have to come up with the capital to buy an investment property because you already own one. You also aren’t buying a new property that you are unused to and may have hidden problems.
You Build Equity
By owning more than one home, you build more equity. Your tenants are essentially helping you build equity. This puts you in a better position faster to take out a second mortgage by borrowing against the equity you’ve built up for both homes.
In several circumstances, renting out your old home when you buy a new one may be the superior option to selling it. Consider these reasons why this choice may be best for you. If you’ve always wanted to be a landlord or thought about investing in real estate, now is a great time to start.