For one reason or another, you’re looking to move. That means you have a house that is going to be empty, and you have to decide what you’re going to do with it. The most common answer is to try to sell the house, but it’s not the only option. You could also rent it, and that might be an enticing option. Which is really better for you? Which makes more money? Which requires more work? We’re going to dive into all of that to help you get to a place where you can make an informed decision.
Pros of Renting
Renting a house is one of the most reliable high-return investments you can make. Rental income is extremely reliable because it is resistant to market fluctuations. If the housing market crashes, your mortgage is already locked in. You don’t have to alter your rental prices to deal with those changes, so you get a ton of stability with this regular income.
Even better, renting builds equity in one of the most tax-advantaged ways possible. As you pay down the principal on the mortgage, you have the option to do cash-out loans. You get a loan for the equity in the house, and you can use that cash for other strong investments (such as additional rental properties). Because this is a loan, you don’t pay taxes on the cash you receive, and you can even earn tax benefits if you invest that money strategically.
Cons of Renting
Renting is great for the finances, but it does have its costs. For one, the work never stops. Renting doesn’t have to be a 60-hour-a-week job, but there is consistent work behind it. As a homeowner, you already know that there is always a new problem to fix with a property. You also have to run the business side of renting. You have to collect rent, find renters, deal with substantially more complicated taxes, and find a way to make all of it sustainable.
They call renting passive income, but the real truth is that you will have to work for that money.
Pros of Selling
Selling a house is simpler than renting. If you have ever sold a house, that might feel like a crazy statement. How is the whole process of selling simpler than renting? Simply put, rental work is endless. Once a house is sold, you have the money, and you’re done. You’re free, and that freedom is compelling.
Selling can also make you a lot more money than renting in less time. If the market is on your side, you can sell for considerably more than you invested. Instead of slowly accumulating wealth, you get a big chunk of cash as soon as the house closes.
Most of all, selling is a great way to wipe the slate clean. If you’re leaving your city or state, you might not want to have to deal with property that is far away. If you’re looking to upgrade your house, the money from selling pays for the new place. If you want to downsize, you can buy your new house outright and have a pile of cash to do whatever you want with it.
Cons of Selling
Even though you just read that selling is the simpler option, that’s only true in the long run. It takes less work to get a renter into a home than it does to sell a home. There is prep work, a ton of paperwork, listing, showings, inspections, and so much more. The selling process often feels stressful. There are also no guarantees that you will make money. If you can’t find a buyer, you have a property just sitting there, costing you money for no gain. There’s a bit of gamble involved in selling. You have to decide for yourself which pros and cons mean more to you, but there’s a hidden option that might make your decision easier. You can get rid of most of the cons of selling by working with We Buy Houses Columbus. You’ll get a guaranteed cash offer for your home, regardless of the market. You don’t have to show the house, list it, fight with complicated negotiations, or go through any of that circus. Even the paperwork is simplified. We’ll handle everything. All you have to do is receive an offer and decide whether you like it. Find us online or call us at 614-699-6464.