If you are a homeowner, chances are you have asked yourself this question a time or two – should you sell or rent? Both have their perks and disadvantages, this will greatly depend on what you are looking for. We will cover the pros and cons of selling and renting.
Perks of Selling
The biggest advantage in selling your home is the profit you could make from it. Especially, if you bought your home after the housing market crash, chances are you will be making quite a lot of money. Whether it be from listing it with an agent or selling it to a cash buyer. Even if you didn’t purchase it around 2008, appreciation always occurs as markets inflate naturally over time. Meaning the value of your house increases each year that passes, as long as the economy stays relatively stable. Another rather large perk in selling now is the increase of buyer demand. According to Ramsey Solutions, from April to June of 2021, home prices rose nearly 23% higher than they were during the same time in 2020. Prices are surging due to the home buyer demand.
Cons of Selling
There aren’t too many disadvantages to selling your home, however there are a few. One downside to selling is timing. Some people rush to sell their home while others wait too long. This can cause you to leave a considerable amount of money on the table. Another con of selling is capital gains taxation. This occurs when the property is sold and the profit exceeds the IRS thresholds. Capital gains gets even trickier when selling a property because of a divorce.
Perks of Renting
Renting out your home or one you own can be an extremely lucrative long-term investment. The rent you charge on your home could not only pay the mortgage on it, but it could also turn a monthly profit over for you. This would eventually pay out the cost of your home and what you bought it at. Then you would have monthly income trickling in with no cost to you. You could also hire a property manager to keep tenants stocked and to keep up with any maintenance issues that may come along while tenants are in your home.
Cons of Renting
Owning a rental property can have its headaches. If you don’t have a property management company handling all the day-to-day and tenant interactions it can be very stressful. You’ll have to cater to their every need; if something breaks it’s your duty to get it fixed. Property management companies also help you find quality tenants. Without proper tenant vetting you can lock yourself into a very difficult situation. As this can lead to mistreatment and damage to the property. Then you have to worry about the eviction process if things get really bad.
Owning a home is one of the best investments you can make. Whether you are wanting to buy and eventually sell later. Or you are looking at renting your home for a long term investment, both turn over profit and both bring in cash flow that you may have not previously had.