Paying off a home and looking for another home can be an exciting time when deciding whether to sell your current residence or turn it into an income property. There are plenty of factors that will decide whether this is the right decision for the family or not. Taking time to write out pros and cons is important as at times seeing a negative aspect of something in writing can help make a decision in your mind clear. The financial situation is going to be different for everyone so no one plan will be a perfect fit universally. The following will examine the different factors that will help you make a decision whether it is to sell or rent your current home out.

Money For A Down Payment On The New Primary Residence

A lot of the time people would much rather rent out their home if they have enough money for a down payment. Most of the time a large portion of a person’s financial value is wrapped up in their home so it is a necessity to sell in order to be able to put enough money down on a new home expenses like mortgage insurance can be eliminated. For those that are downsizing due to expenses being too much will most likely just sell and use the excess money from the home for lifestyle expenses. The last thing that as home buyer wants is for their deal to fail on the property they are selling only to miss out on a dream home. Trying to align selling  a home can be tough so considering a cash buyer could be best recommends Alex Uktamov, Founder of Sol Green Homes, South Florida based real estate investing company

Does The Home Need Quite A Bit Of Improving Or Maintenance Before Renting?

We all know which parts of our home that we have neglected whether it was the carpet in a bedroom or ignoring water stains that could be signs of plumbing issues or leaks. There are some repairs that you will have to handle whether you are selling or renting the home. Others can be put off if selling or negotiated during closing as some people just want to be done with the home selling process. Doing this quickly can help reduce the stress associated with this sometimes lengthy process. A cash offer can help a seller that needs the money or simply does not want to deal with realtors or offers falling through multiple times. Inspections of homes will often uncover problems that either can cost quite a bit to remedy or will negate an offer due to being such a large issue. The last thing any seller wants is their home’s value to drop drastically when selling to purchase another property.

Proximity Between Current Home And New Residence

Having a property in a city across the country from where you now reside can be nothing short of a nightmare. If you are just moving a few minutes away then this is a far different situation. In these cases you can drop by to show the property to perspective renters or pick up a rent check if a renter needs to pay a few days late. Those that live far from their property are going to have to look into hiring a property management company which will be discussed later in this article.

Taxes Versus Rental Prices In Home’s Location

Taxes differ immensely depending on your location so the tax rates might make it wise to sell your home. With taxes being this high getting the most money for your home with a cash offer will be the best choice when compared to a realtor taking a percentage of your profit. Doing the research on rental prices in your area will be quite easy as there is plenty of data available online pertaining to this. Comparing how much money you will be profiting off of renting the home when factoring in maintenance and taxes is imperative. Selling your home might be a far better choice as this money can appreciate in an investment rather than profiting only a little off of a few hundred thousand dollars’ worth of investment.

Managing The Property Or Hiring A Company To Handle It

People that have investment properties for the most part want this to be passive income. If you constantly have to hound renters for payment or keep receiving calls at all hours, then looking into hiring help would be wise. Property management companies handle numerous properties and have policies that will help protect your property. The one nightmare of anyone that is thinking about renting their current home is getting tenants that do thousands of dollars in damage to the home. Property management companies will do background checks on potential tenants as well as a rental history check. If a person has broken numerous leases or have been evicted in the past the company will skip over them. The property management companies will take a small percentage of rent as their fee. This could be 6 percent of the rent as well as one full month’s rent for the entire year. These companies often list the properties at higher rates than an owner would which can make up for the fees by itself.

Outlook Of The Housing Market In The Area

There is a chance that you could be sitting on a gold mine with your current home. This means that property values as well as rental prices are increasing year after year. A person would be unwise to sell a home in this situation as the investment on the home will be appreciating annually as well as rental income will grow year after year. There is a chance that the housing market in your area is falling and in these cases it is time to sell. Selling fast in a falling housing market is key so having a realtor trying to maximize their commission at your expense is not an option. A cash buyer that gives you a fair price and closes the deal fast can avoid the waiting and worrying game in a declining housing market.

Paying For Your New Mortgage With Rental Payments

A great scenario is where a person has the ability to rent out their old home and pay the mortgage on their new residence. Having a nest egg in the form of a home that can be sold if you need cash is a luxury that very few people have. There is a peace of mind that can be attained by having a home that is already paid off if you default on your current mortgage. You can even finish paying off a home with rental payment if you simply want to move but think the home is a great investment.

Delay Selling By Renting

If you want to raise some money for improvements on the home before you sell it you can fund these improvements with the rent that is collected. Another situation is that of an impending divorce as people might be willing to split rental income instead of taking a loss on the home if the market is down. At times if the divorce is contentious enough both parties will just want to cut ties and sell as quickly as possible. This does not mean that they cannot get a great offer but it does mean that they should both try to get the most money possible by cutting out realtors that will take a percentage of the gross sale. Putting the house on the market to see if it garners offers quickly can be wise and a way to test the market. If you are happy with the results then you have to make a choice on the data that you have.

The decision whether to sell or rent out your current home when looking for another primary residence is a tough one. Having so much equity tied up in a home that you are not living in without a decent monthly return via rental income is not worth it. Take a look at the rental market to see if it is worth the headache of renting or if it is time to sell. Talk to a real estate professional if you need to as many are willing to give advice in hopes of signing you as a client. A financial advisor might also be a good idea to consult as your cash flow might not be sufficient without selling your current home. Take your time when deciding this as it can impact your quality of life immensely in the coming years.