Would it be better to sell this home now, or rent it out and sell later? Making an informed decision can impact your financial well being for decades to come. Often times moving goes hand in hand with selling a home…..but not always. In some cases people know that they will only be leaving for a few years while they pursue a degree, project for work, or perhaps a sabbatical. Sometimes the wannabe seller has no choice but to rent as the value of the home is less than the mortgage and they do not have enough cash to cover the difference at closing. Maybe the market is on the verge of an uptick which will cause the value of the property to surge.
Regardless of the reason, it is extremely important to understand the financial ramifications of the decision that you are about to make. We have created a sophisticated model that will help you to weigh your options and make a good decision.
It is imperative that the following questions be asked before a decision can be made.
Information Needed from the Owner
Is this your primary residence?
Have you lived in this home for two of the past 5 years?
Price you paid for the house?
Improvements made since purchase? ($)
What is the balance on your mortgage? ($)
What is your current interest rate?
How much are your taxes & Insurance on the home?
What is your income tax rate?
How many Square Feet in the home?
Information needed from your real estate professional
How much will your property rent for? (Monthly)
How much would your property sell for on the open market?
What is the replacement value of the home?
How many months of supply?
Utilizing our model will yield results in the following format…..
(The following results assume that rents as well as market values are STABLE) We can run an analysis with Increasing as well as decreasing values very quickly.
Would it be better to sell this home now, or rent it and sell later?
My analysis shows that you would be $15,595 better off if you RENT IT OUT.
Would it be better to rent it and sell in 3 years?
My analysis shows that in 3 years time, You will be $3,858 better off if you SELL NOW.
Would it be better to rent it and sell in 5 years?
My analysis shows that in 5 years time, You will be $47,148 better off if you SELL NOW.
Diclaimer – We are not attorneys or accountants and we recommend that you seek advice and council from anyone that will shield us from liability.
Get a list of the PROS and CONS of Renting your Property Vs. Selling by emailing Tim Bray @ Tbray@seaportre.com
Tim has a four year degree in Real Estate & Urban Ecomomics from UConn and will help you make an informed decision.
Posted by Tim Bray on