Should I keep my house as a rental or sell it?
Deciding whether to sell your house or retain it as a rental property is a significant financial decision that homeowners often face. While selling a home may seem like the more straightforward choice, there are several compelling reasons to consider keeping your house as a rental property.
Let’s explore the strategic benefits of renting out your property, becoming a landlord, and retaining ownership of your property.
9 Benefits of Renting Out Your House
- Steady Rental Income
One of the primary advantages of keeping your house as a rental property is the steady stream of rental income. This income can help offset your mortgage, property taxes, and maintenance costs, making homeownership more affordable.
- Build Equity Over Time
By retaining ownership of your property and renting it out, you continue to build equity in the home. Over time, this can lead to substantial wealth accumulation as property values typically appreciate. Also keep in mind, if you have a mortgage on the property, you will have a tenant paying down that balance at the same time your property value is likely increasing. Double win!
- Tax Benefits
Rental property owners can take advantage of various tax deductions and incentives, including deductions for mortgage interest, property taxes, and maintenance expenses. Consult with a tax professional to maximize these benefits.
- Long-Term Investment
Real estate has a history of long-term appreciation. By holding onto your property, you have the potential to benefit from its increasing value over the years. This can be an excellent retirement strategy.
- Diversification of Investments
Owning a rental property can diversify your investment portfolio. Real estate often behaves differently from stocks and bonds, providing stability during economic downturns.
- Option for Future Residence
Keeping your property as a rental gives you the flexibility to move back into it in the future if your circumstances change, without having to repurchase a new home.
- Inheritance for Future Generations
Retaining your property can also be a way to leave a valuable asset to your heirs, helping to build generational wealth.
- Market Timing
Selling a property is often influenced by market conditions. By keeping your house as a rental, you can wait for a more favorable time to sell when property values are higher.
- Leverage for Future Opportunities
Many landlords take advantage of the IRS 1031 Exchange. This allows you to sell an investment property and roll the equity into another investment property without paying capital gains.
Consider Renting Out Your Property
Keeping your house as a rental property instead of selling it offers numerous financial and strategic advantages.
While it may require additional responsibilities as a landlord, the benefits of steady income, building equity, tax advantages, and long-term investment potential can make it a wise decision for many homeowners.
Consider your financial goals and contact us to see if turning your home into a rental property makes sense.
“Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world.”—Franklin D. Roosevelt
Rent vs Sell Resources
If you’d like to learn more about the benefits of renting vs selling, please check out our other articles on this important topic.
If you’d like an estimate on the financial comparison of renting vs selling, please check out this calculator tool.