Answering the question: Should I rent for a while instead of selling right now?

for rent 4.jpgEven in the midst of the best market there can be a great deal of stress and apprehension around selling your home. This could be coming from a myriad of things, but usually it all boils down to being worried about whether you’ll be able to sell your house for the amount of money that you want.

Every now and then clients ask me if they should hold off and selling and just rent out their place for a year or so… and almost every time the answer is ~ no.

Does it ever make sense to just rent out your property instead of selling? Sure, it could give you a few more years of appreciation or give time for a slow market to improve. In a way that might seem to make sense, but we don’t usually recommend it.

Why not?

Unless you were planning on using your home as a longer term investment and keeping it as a rental, it probably doesn’t make sense for you to rent it out for a short term length of time.

Let’s be honest, renters can be the worst. Sure, you might get a great tenant who pays rent on time and doesn’t damage your house, but the odds of you finding a tenant with a great design sense who takes the same level of care of your house as you and will keep it looking great ~ rare. Most tenants won’t take care of your house the same way you would, and they don’t invest the same time, energy, and definitely not money, that you have in the design. And I say that as someone who was a great tenant  {if I do say so myself} and definitely had my apartment looking amazing, but I’m also in the design field so I’m not the majority of people.

Real estate markets don’t typically make huge shifts in a short amount of time, so renting your house out for a year or two probably isn’t going to increase the value by very much. But if you decide to wait when the market is already strong, the risk is that the market will start to slow down, which isn’t what you want.

The current market has been very strong for the last several years and continues to be a great market for sellers. There is historically low inventory and still see multiple offer situations {mostly in the spring}, but things aren’t quite as crazy as even two years ago. So when seller’s talk to me about being nervous about selling and start talking about waiting I can’t help but wonder ~ wait for what?!

Ultimately, if you do decide to rent instead of sell, for any length of time, it’s important to plan for when you eventually do sell.

You need to plan for the cost of any repairs, the overhead of selling your space without a tenant in place, and the additional cost of staging. Because in reality, the two things that typically don’t get buyers excited about a space are tenants with junk all over the place and ugly furniture, or an underwhelming empty space. When you factor in mortgage payments plus staging and repair costs, those costs can quickly add up… we might get your house under contract quickly, but it can be anywhere from 45 – 60 days until the closing once you are under contract.

The question that you need to ask yourself is ~ what is the difference between what I am likely to sell my house for in the current market, and what I am hoping for. Is that number realistic given the condition of the house or other market factors? If you rent, how long would it take for your house to appreciate to where you want it? It might be worth it to hold onto the investment when you look at those things, but many times it’s an equation that doesn’t work out when you factor in all of the costs and variables.

If you’re unsure about whether it’s a good time to sell your house or want insight into things you might be able to do  to increase your home’s value {like strategic updates}, send me a note and let’s chat!

 

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