• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Legal Templates

Legal Templates
  • Business Forms
    • Business Formation
      • LLC Operating Agreement
      • Articles of Incorporation
      • Shareholder Agreement
      • Partnership Agreement
      • Business Purchase Agreement
      • Joint Venture Agreement
      • Single-Member LLC Operating Agreement
    • Business Operations
      • Letter of Intent
      • Non-Disclosure Agreement (NDA)
      • Non-Compete Agreement
      • Invoice Template
      • Purchase Order
      • Hold Harmless Agreement
      • Release of Liability Form (Waiver)
      • Buy-Sell Agreement
      • Construction Contract
      • Licensing Agreement
    • Employment
      • Independent Contractor Agreement
      • Employment Contract
      • Freelance Contract
      • Leave of Absence Letter
      • Leave of Absence Agreement
    • Cease and Desist Letter
      • Copyright Infringement
      • Debt Collection
      • Defamation
      • Harassment
      • Trademark Infringement
  • Real Estate Forms
    • Lease Agreements
      • Lease/Rental Agreement
      • Sublease Agreement
      • Room Rental Agreement
      • Month-to-Month Lease Agreement
      • Commercial Lease Agreement
      • Short Term Lease Agreement
      • Land Lease Agreement
      • Lease Renewal Agreement
      • Lease Amendment
    • Lease Termination Letter
      • Eviction Notice
      • Notice to Vacate
      • Early Lease Termination Letter
      • Late Rent Notice
    • Deeds & Property
      • Warranty Deed
      • Mortgage Deed
      • Quitclaim Deed
      • Deed of Trust
      • Mechanic’s Lien
      • Property Management Agreement
    • Rental Application
    • Real Estate Purchase Agreement
    • Employment Verification Letter
  • Estate Planning Forms
    • Power of Attorney
      • Medical Power of Attorney
      • Durable Power of Attorney
      • Revocation of Power of Attorney
    • Wills
      • Living Will
      • Last Will and Testament
      • Codicil to Will
    • Advance Directive
    • Living Trust
    • DNR Form
  • Finance Forms
    • Loans
      • Promissory Note
      • Loan Agreement
      • IOU
      • Demand For Payment Letter
    • Bill of Sale
      • Vehicle Bill of Sale
      • Boat Bill of Sale
      • Firearm Bill of Sale
      • Horse Bill of Sale
      • Trailer Bill of Sale
    • Sales & Purchases
      • Sales Agreement
      • Purchase Agreement
      • Gift Affidavit
      • Stock Purchase Agreement
  • Personal/Family Forms
    • Affidavits
      • Affidavit of Death
      • Affidavit of Domicile
      • Affidavit of Heirship
      • Affidavit of Identity
      • Affidavit of Residence
      • Affidavit of Service
      • Affidavit of Title
      • Financial Affidavit
      • Gift Affidavit
      • Small Estate Affidavit
    • Marriage
      • Divorce Agreement
      • Prenuptial Agreement
      • Cohabitation Agreement
      • Separation Agreement
      • Postnuptial Agreement
    • Child & Pet Forms
      • Child Medical Consent
      • Child Travel Consent Form
      • Child Custody Agreement
      • Pet Care Agreement
    • Medical Records Release Form
  • Resources
    • Legal Dictionary
    • All Legal Documents
    • Article Categories
      • Business
      • Estate Planning
      • Financial
      • Personal & Family
      • Real Estate
  • Help
    • Email Us
    • Contact Us
    • About Us
  • Sign In
  • :email
    • Dashboard Home
    • My Account
    • My Billing History
    • Sign Out
  • Help
    • Contact Us
    • Email Us
    • About Us
    • (855) 335-9779 Monday-Friday, 10AM - 6PM EDT
  • Sign In
  • :email
    • Dashboard Home
    • My Account
    • My Billing History
    • Sign Out

Home Resources Real Estate Should You Rent or Sell Your Home?

Should You Rent or Sell Your Home?

The Legal Templates Team

Published February 23, 2016 | Written by The Legal Templates Team

As you survey the rooms in your house, with the immaculate space sparkling with real estate possibilities, you contemplate the probable paths for the future of your current home. One decision many homeowners have to make is whether it is in their best interest to rent or to sell their home. Whether you are relocating, wanting to keep it as an investment property, or needing funds for a down payment on your next home, this dilemma can involve many financial decisions, stress, and unexpected expenses. These pros and cons of renting and selling both weigh in on the financial gains and convenience.

Renting Your Home

Would you want to be a landlord?
Would you want to be a landlord?

Pros of Renting your Home

Home Value Appreciation

You may want to refrain from selling your house right away if there is a possibility of your property value increasing throughout time. Waiting for your property value to appreciate and selling it then could bring you a profit. In the interim, renting out the place could be a good way to earn additional income. There are several ways to determine your home value.

Cash Flow

Renting out your property can bring in a steady flow of cash.  Being a landlord can serve as a job while offering more flexibility in your schedule and still providing passive income. This is useful if you are in need of monetary funds for future investments or to pay off expenses in other areas of your life. You can determine what rental rate is best for your property in the area.

Tax Deductions

Similar to earnings from any other job, you’re subjected to income taxes for the income you collect from your rental. Fortunately, you may be exempted from the costs that are associated with renting out the property. Read more on tax benefits.

Property Renovation

The additional income from your rental could also be used to meet some of your other goals such as home improvements. For rental property owners, these repairs are typically tax-deductible as well.

Maintain Home Ownership

Renting your property can offer you more flexibility. If you are changing locations or traveling and still have a plan to return to your property this option allows you the freedom of moving back anytime you decide.

Cons of Renting your Home

Time and Stress

Being a landlord brings a lot of responsibilities to the table. This includes maintenance of the house, repairing appliances, managing rent payments, and handling difficult tenants. All of these responsibilities could eat up a lot of your time and could carry weight as a second job. In addition, if you don’t live near your rented out property managing problems could be more challenging. To deal with issues on the property promptly, you might have to hire a property management company or pay travel costs.

Unexpected expenses and maintenance

Sometimes you don’t know what kind of tenant you will have until a few weeks or months into the lease. Issues are bound to occur, perhaps a tenant breaks a stove or toilet, now it can cost hundreds of dollars out of your pocket to repair. In some cases, the tenant could bring financial losses on your behalf if they don’t pay rent. It can be difficult to forecast these unanticipated damages and costs that might throw you off your financial budget.

Other potential expenses

Since you still hold ownership of the property, there are still expenses associated with it. This can include mortgage payment, property taxes, landlord insurance, and accounting and property management fees.

Possibility of damaged property and losses

When you’re renting out your property for others to live in, you risk it being damaged. As a landlord, you never know what to expect when it comes to putting your property under the care of someone else. If faced with a difficult tenant, they may even damage and destroy the property, incurring even more costs. Repairing and renovating the property takes up a lot of time and could affect your timeline of wishing to rent out to future tenants or selling to future buyers. Tiffany C. Wright, the owner of a real estate investment firm and The Resourceful CEO, shares her advice on preventing a bad tenant experience,

My philosophy is to screen well. Furthermore, I document everything and request the tenant’s signature whenever possible. I use applications, security deposit receipts, move-in condition forms with photos or a video, a 6-8 page lease agreement, rent reminder phone calls, thank you calls or cards, rapid follow-up to repair requests, occasional drive-bys and immediate and full enforcement of infractions. This enabled me to find tenants that lasted and to quickly get rid of tenants that did not.

Wright’s words take a practical look at the amount of responsibilities and work a landlord must carry, which you should take into consideration before deciding to rent out your property. If you wish to rent your property, be sure to have a lease agreement and rental application ready to go.

Selling Your Home

Making a home sale
Should you sell your house?

Pros of Selling your Home

Cash Out Right Away

If it seems that the market value of your property is at its optimum, then it could be a good idea to sell it while it’s still worth its maximal value. In the case that you are planning to buy a new property, then receiving this upfront payment could ease some financial stress.

Less Responsibility Afterwards

Once you sell your house, the responsibilities tied to it are minimal compared to renting it out. You would not have to deal with the maintenance of the property or payments such as the mortgage for the house.

Costs are Usually More Predictable

There are many expenses involved when selling a property including real estate commission, title insurance, closing fees, and more. Knowing these costs upfront can make the process much easier to plan and less stressful when budgeting.

Don’t Have to Worry About Damages Caused

When you sell your property to someone else, you no longer have to worry about it being damaged. Although renting offers a steady cash flow, the potential damages caused lead to charges for repairs and maintenance. Selling your house will not only give you the capital upfront, it also means you can wipe your hands clean of any problems or stress in the future.

Cons of Selling your Home

Hassle

Sometimes there are uncontrollable factors that make it difficult for your house to sell. This can include the home having a problematic history or being located in an unpopular area. It takes a lot of effort and work to sell a house since it is a huge financial commitment for the buyer. This involves establishing a value for the home, determining an appropriate price, hiring a real estate agent, upgrading the property, and advertising properly. This all requires a lot of time and research to make sure things are in place for the most profitable outcome.

Possible Loss

For some homeowners, they have to take a loss to sell their home. Perhaps your house is worth less than what you bought for it years ago. This loss can be tens of thousands of dollars. However, in some cases, a capital loss could reduce your taxes.

No ownership

Once you sell your house, there is no going back. Perhaps you have a sudden change of plans and realize you wish you could still reside in your former location. As selling your house is a big decision and commitment, it should take any possibility into account.

More expenses at closing

These expenses can include  real estate agent commissions, transfer taxes, home warranty for the buyer, capital gains tax, and closing costs for the buyer. Some of these you might be exempted from but still cost a great deal of money. Moreover, even after the sale, as the previous homeowner, you may still be liable for repairs as it is common for home buyers to also request the sellers to cover for any defects discovered after closing. Still vacillating between decisions? Check out this calculator to see whether renting or selling out is financially best.

Time to make the decision- who will you hand your keys to?
Time to make the decision- who will you hand your keys to?
The Legal Templates Team

The Legal Templates Team

Staff Writers

The Legal Templates team is a dedicated group of legal counsel, product specialists, and staff writers, who tirelessly work together to provide users the information they need about commonly used...

Related Articles

  • Types of Deeds: 6 Different Types of Real Estate Deeds
  • Deed vs Title: What’s the Difference?
  • What is a Quitclaim Deed?

In This Article

  • Renting Your Home
  • Selling Your Home

Legal Documents

  • All Legal Forms
  • Bill of Sale Forms
  • Quitclaim Deed
  • Cease and Desist
  • Last Will and Testament
  • Articles of Incorporation

Popular Forms

  • Lease Agreements
  • Power of Attorney Forms
  • Eviction Notice
  • Living Will
  • Non-Disclosure Agreement

Resources

  • Legal Dictionary
  • Business
  • Estate Planning
  • Financial
  • Personal & Family
  • Real Estate

Company

  • Home
  • Pricing
  • Blog
  • About Us
  • Contact Us
  • Partner With Us

Users

  • Account
  • Terms of Use
  • Privacy Policy
  • Do Not Sell My Personal Information
  • Cookie Preferences
McAfee - Together is power.
Trustpilot
BBB Accredited Business

(855) 335-9779, Monday-Friday, 10AM - 6PM EDT

Facebook Twitter LinkedIn

Copyright 2021 Legal Templates LLC. Legal Templates LLC is not a lawyer, or a law firm and does not engage in the practice of law. Legal Templates cannot and does not provide legal advice or legal representation. All information, software and services provided on the site are for informational purposes and self-help only and are not intended to be a substitute for a lawyer or professional legal advice. Use of this site is subject to our Terms of Use.

Thank you for downloading one of our free legal templates!

Leave us a review?

We hope you've found what you need and are able to avoid the time, costs, and stress associated with dealing with a lawyer.

If you have a moment, a review would mean the world to us (it only takes about 15 seconds).

Thanks again, and good luck!

Leave My Review