So you have decided your home is no longer fitting your needs. How do you make the decision of whether to rent or sell your home? Here are 6 questions to ask yourself.
- Is your move permanent? If you are leaving the area for a period of time but eventually plan on moving back to the area renting may be a perfect way to offset the costs of keeping your home and having it waiting for you when you return.
- Can you rent your home for enough to cover your mortgage and expenses? The rental market in the Denver metro area is pretty strong and usually will cover your costs of keeping your home.
- What is your financial situation like? Do you need to sell your home to purchase another? Can you afford to pay your mortgage during a vacancy? Can you afford any potential repairs that come up? Selling may be the way to go if any of these would be financially challenging for you.
- Do you need more tax deductions? When you rent your home you get to depreciate it for tax purposes. You can also write off repairs, property management fees, property taxes etc….Renting can be a great way to offset tax liabilities.
- Does it look like home prices are going to increase in the next 10 years? If the market seems to be steadily appreciating you may want to consider renting to build equity in your home while someone else pays your expenses.
- Will you be ok with someone else living in your home? No matter how well you screen your tenants your home will receive some wear and tear. They can smudge the walls, wear the carpeting and forget to water your prized rosebush. If this will drive you crazy you may want to sell your home instead of renting.
Renting your home can be a great way to offset your monthly expenses and build equity in your home but it is not for everyone. Weigh your options carefully and decide what is best for you and your family.