If you’re thinking about moving out or are actively trying to move to a new home, you have two choices: rent or sell. Both are big decisions. If you aren’t quite sure which is right for you, take a look at the pros and cons of renting vs. selling.
The Pros of Renting
Almost everyone who rents out their home will tell you that the biggest upside to renting out their home is the passive income that comes with it. Being a landlord requires some effort, and learning how to turn your house into a rental property takes time. But when compared to how much you put into your everyday job, the amount of effort is minimal. Plus, you don’t have to rent out your property forever. Once the home appreciates in value, you can sell it for more than you bought it for. Either way, you can walk away with a decent amount of cash or have a goose egg to rely on for retirement.
The Cons of Renting
If you’re not a people person, being a landlord may not be for you, especially if you don’t want to put in at least some work. It takes a bit of time to write up a lease, market the home, and find a tenant. If you do it right, it can be lucrative, but it’s not a set-it-and-forget-it kind of deal. You’ll still have to contact your tenant, make sure they pay you on time, and pay for repairs—while repairs are tax deductible, it’s still work.
The Pros of Selling
Selling your home gives you the money you need to pay for your next house immediately, and once you sign the paperwork, you don’t have to worry about it anymore. This is the best option for those looking to move on entirely. Plus, it doesn’t come with any of the work of being a landlord. Ultimately, it’s the easier route and the best one to take if you want to access immediate capital.
The Cons of Selling
Unfortunately, when selling your home, there’s always a chance that you’ll lose money, as you may not get back what you paid for it. Often, it’s not as easy as selling and moving on, either. It takes time, money, and effort to sell a home, and depending on the demand in your area, your house might be on the market for a long time.
Which One Is Right for You?
Now that you have an idea of the pros and cons of renting vs. selling, you can decide which one is right for you. If you want the income that comes with renting, and the demand for rentals in your area is relatively high, you should consider renting out your property. However, if you have no interest in being a landlord and you think you can make a good profit upon selling your home, take the opportunity to sell. There’s no right answer. It all depends on what your resources are, what you’re comfortable with, and the effort you want to put into it.