Ah yes, the age old question: "should I sell my home or rent it out?" Okay, maybe it's not age old, but it is definitely something that a lot of homeowners consider when they are planning on leaving their property. While selling a house has its benefits, renting out your home can lead to consistent cashflow streams which can ultimately make you richer and happier.
So let's answer this not-so-age-old question with the pros and cons of each option!
Pro #1: First of all, selling your home is a short-term time commitment. This means that it is incredibly time-consuming during the process, but once you sign all the paperwork and shake all the hands, you no longer have to think about it! If you are a person with a busy lifestyle, it is definitely best to sell your home to be done with it.
Pro #2: In most circumstances, selling your home allows you to pay off your mortgage. No longer having this debt on your shoulders is typically a huge relief, but if you purchase a new property, this relief won't last too long!
Con #1: As stated in pro #1, selling your home is an incredibly stressful process, especially if it is your first time. Even though it only lasts months, everything from hiring a realtor to signing the paperwork is an emotional and difficult process for many home-sellers. For some guidance, check out our Home Seller's Guide for everything you need to know about the process.
Pro #1: By renting your home out and retaining ownership, you can potentially see an increase in your home's value. This can be from the growing market or the repairs and renovations you must do to the home over time. When you do eventually decide to sell, you can potentially make more from the sale PLUS all of the cashflow streams from the people renting out the home.
Pro #2: As stated above, renting out your home earns you regular rental income while you continue to pay down debt and earn equity in your home. Setting a good, realistic rental price is key, as it can help you pay off your mortgage and leave you with some profit. We highly recommend contacting realtors and other experts and discuss this option in depth.
Con #1: Renting out your home can be incredibly time consuming, and as long as it is being rented out, you have responsibilities that you must attend to. These can include regular repairs and renovations and keeping in touch with the people renting out your home.
Con #2: If your property sits vacant for any period of time, you must be prepared to seek people to rent it out and pay two mortgages. If you cannot cover two mortgages for an indefinite period of time, renting is a highly risky option.
Before making this decision, we highly recommend that you determine your home's value first. A seller’s agent can provide you with seller’s estimated net proceeds worksheet, which will outline all of the costs associated with selling your home. Based on the difference of these costs and your mortgage, the agent should be able to help you with deciding on selling or renting. If, for instance, you are left with a small amount upon selling your home, it may be best to either wait or rent it out.
While selling can allow you to pay off your mortgage and is not too time consuming, it is an emotional process that may not give you as many rewards as renting.
Renting out your home can lead to an increase in your home's value and earn you regular rental income, but is incredibly time consuming. You should also be prepared for the home to be vacant at times, leading to high costs until you can rent it out.
If you need to sell or buy a home, a Qube REALTOR® can help you navigate the market safely and with professional insight. Qube supports Quebec residents by providing full-service real estate experiences with incredible rewards: sellers save thousands in commission and buyers receive cash back when they purchase a home with one of our REALTORS®. Visit our website here or call 1-877-410-7823 to learn more.