Some Reasons to Rent Your House Instead of Selling it
Read this tip to make your life smarter, better, faster and wiser. LifeTips is the place to go when you need to know about Why Renting Makes Sense and other Rental Home topics.
What Conditions Might Influence Me to Rent My House Instead of Selling it?
Why do people rent instead of sell their homes? All business decisions contain pros and cons. There never has been a “perfect” decision. Even Bill Gates will admit that reality. Or ask Ford about the Edsel. Or, now, even ask Polaroid about instant film. Many decisions are influenced by “timing” as much as classic wisdom. An answer to the question, “Why you should rent instead of sell your home?” often falls into the timing category. Here are some reasons to consider renting instead of selling your property.
- The real estate market is trending downward. When market prices trend down, more inventory (homes for sale) flood the market, often outstripping the demand of buyers. The law of economics 101 soon takes over. This oversupply tends to drive prices further downward so sellers can actually sell their properties. By renting your home for a reasonable price, you may attract qualified people who were looking for apartments for rent. This buys you time to wait out the down market and sell your home when prices are increasing.
- You don't need the cash proceeds from a sale to move to your next residence. You could continue to enjoy the tax deferred increase in the value of your asset – your house – while generating monthly income to cover expenses and give you some profit.
- You have an employment situation that will take you away for some time, but you're planning on returning to your home. Whether you're in the military, working for the State Department, CIA, or have a position that requires you to be in other states or countries for long periods of time, you should consider renting your home versus finding apartment rentals. Some people enjoy having the security of knowing their “castle” will await their return.
- There is a shortage of mortgage money in the market. Unless you've neglected to watch TV or read a newspaper, you're aware of the huge reduction in mortgage money available in the U.S. since 2006. Like real estate market price fluctuations, this condition has also happened before and will happen again. As a potential seller, your possible market of “qualified” buyers has shrunk dramatically. This condition alone may dictate why you should rent instead of try to sell your home.
Much of your decision rests upon a) personal preference and plans, b) market conditions, and/or c) income and tax considerations. Think honestly about what you visualize for your lifestyle and financial plans. Do what is best for you. Consult with professionals (particularly about tax considerations) when appropriate.