Have you been wondering whether you should rent or sell your house? When the coronavirus pandemic completely altered the housing market, Americans started to wonder if they needed to relocate as they had to spend more time indoors during social distancing and the mandated lockdowns.
The situation remains during the new normal, where more people are starting to wonder whether they should rent or sell their houses. While there are advantages and disadvantages to these two options, there are other factors to consider, such as your personal circumstances, financial situation, and the condition of your property in Phoenix, Arizona.
One of the most feasible options is to request a cash offer from home buyers such as Andrew the Homebuyer to sell your home fast for cash. When you finally decide to sell your house, to help you make the correct decision, below are the pros and cons of renting or selling your house.
Pros of Renting Out Your House
The following are some of the advantages of renting out your house.
Create Equity
When you rent out your house for a more extended period, there’s a higher possibility of building equity to cover your property mortgage and interest. These will be covered by your tenants’ monthly rent — lowering the principal balance you have to pay in the long run. This rental income will also serve as coverage for the other financing expenses of the property.
Passive Income
As long as you employ the correct strategies and develop your properties consistently, your rental income will look more promising later on. This is why some homeowners prefer to rent out their house first before selling it. However, we aren’t saying that landlords always have an easy time managing their property. A lot goes into being a landlord, and it will require more effort once the number of tenants grows.
More Options
When you offer property rentals, you’ll have more options, such as whether you’re renting out long-term or short-term. An excellent example of the latter is Airbnb, where people can rent properties short-term. This kind of venture depends on the type of property you have as well. However, if you need quick cash, you might as well consider selling your house in Mesa to Andrew the Homebuyer.
Avoid the Bad Market
Renting out means you can wait before selling your house, especially if the market is not going well. You can wait until the market is favorable before selling your home.
Low-cost Leverage
Taking advantage of low-cost capital financing will help you gain better equity returns. In recent years, debt financing has been very ideal for the real estate market due to the low mortgage rates. When you rent out your home, your tenants basically pay you the low-cost leverage.
Cons of Renting Out Your House
Below are some of the disadvantages of renting out your home.
Time-consuming and Expensive
Being a landlord will require more hands-on effort on your part. You’ll have to learn basic handyman skills, contact tenants for specific concerns, and collect rent. Some of the repairs can be expensive, so you’ll need to shell out a large amount of money later on. This is why selling your home in Maricopa County to Andrew the Homebuyer remains the best option.
High-risk
There will be stubborn tenants; this is the inevitable part of being a landlord. The evictions and late rent can affect your rental income and cost you more time. You will have to look for another tenant to rent your home, which is not necessarily the best option in this scenario.
Vacancy
A vacancy is bad news for landlords. This will lead to a financial burden later on due to the quick halt to your passive income. Looking for tenants isn’t necessarily a walk in the park.
Pros of Selling Your Home
If you’re more inclined to sell your house rather than rent it out, below are some of its advantages.
Less Taxes
You can save up to $200,000 in terms of capital gains tax when you sell your house. This is the case when you have lived in your house for two out of the past five years. This is a huge financial advantage on your part as capital gains tax can highly affect your profits.
Regain Capital
Selling your home means regaining a certain portion of your capital so that you can invest the same in other ways. Price appreciation and mortgage repayment are two of the means you can recognize some gains in your equity.
It can be challenging to sell your property unless you contact a reliable cash homebuyer like Andrew the Homebuyer. Your realtor may make mistakes, and you may encounter clients who demand unreasonable prices for your property.
Taking Losses
Like other forms of sales, selling your house may either mean gaining or losing. This depends on the market value at the time of the sale. If you’ve invested a significant amount for your property and received a lower amount for the sale, then this means you’ve taken a loss.
To Rent or To Sell?
Your final decision will rely on several considerations, such as your financial situation. Still, selling to cash home buyers such as Andrew the Homebuyer will provide you with the money you need for other matters — perhaps a relocation or new property.
To make a sound decision, you must consider the important factors thoroughly and act from there. If you’re planning to sell your house fast, request a cash offer from Andrew the Homebuyer today for a smooth-sailing transaction.
