When you're considering buying a new home, you have to figure out what to do with your existing property. It basically boils down to major two options, you could sell your property or you could rent it out. So, what should you do?
This question, like most questions involving real estate, is not really what’s right or wrong, but more about understanding your options and making the best decision for your situation.
Let’s check out the advantages to both options:
- Take Your Equity - This is probably the biggest advantage to selling your property. When you sell your property, you can use the equity you have to put towards a downpayment on your new house. It’s always to your benefit the more money you can bring in and put down.
- Less Stress - Honestly, there are a lot of people who just aren’t cut out for the life of a landlord. While some tenets are a dream to manage, there are others who require a significant amount of time and patience. Of course, you could contract this responsibility out to a property management company, but it’ll cost you.
- No Maintenance - As any homeowner knows, homes go through normal wear and tear throughout the years and keeping your home and all it’s appliances in good condition requires consistent maintenance. If you don’t want to deal with the bills and hassle of repairs, then selling your property might be your best option.
- Build Assets - Keeping your house and renting it out can be a great way to help fund your retirement. While you have tenants living in your property, they are paying or helping to pay your mortgage. Once you finish paying off that mortgage you own that asset. You can then sell the house and convert your equity into a lump sum, or continue renting it and collecting income during your retirement.
- Cash In On Market Appreciation - If housing prices continue to rise as they have in the past, holding onto your house for a few years can pay off big! Your home will be worth more due to the market appreciation.
But how can you know if house prices will continue to rise? Truth is, you can’t know with 100% certainty, but talking to your trusted real estate consultant at BHURDinUtah about current and past market trends can help you make an informed, confident decision.
If you are seriously considering renting your home, you really need to know and be confident your finances. You will become the proud owner of two homes! And if you plan on taking out mortgages for both those homes, you will need to qualify for loans on both properties. Now, something to keep in mind is that if you can show a track record and contract that you have had tenants living in your property for a period of time, that can be considered income that can help you qualify for a loan. But ultimately you will be responsible for making payments on both loans.
We know that knowledge is power here at BHURDinUtah and we want to make sure our clients and future clients have access to all the knowledge they need to make informed decisions about real estate. If you have a question, call a BHURDinUtah real estate consultant today and we’d be happy to discuss your options and help you understand what works best for you.