Should You Stay or Should You Go?
Meaning, should you sell your home now or rent it first? The answer is, “It depends.” Rather than obsessing over the title of this blog and why it sounds familiar, you can make an objective decision with a little math and a few considerations.
- What would you net if you sold your home? Consider your mortgage payoff and selling costs.
- Would renting the home produce true positive cash flow? Rental income must cover mortgage, taxes, maintenance, vacancy and turnover periods, large repairs, and management. With some maintenance and repairs you must comply with state and local regulations.
- What is your total return on equity? Would your money generate more income as a rental property; or would it perform better in another type of investment (ex. 401K or brokerage account).
- Are you ready to be a landlord?
Be sure to loop in your lender if you are financing your next home, you will want to understand how renting may impact your purchasing power and how they count rental income. Also, consider connecting with your tax accountant or other financial professional before jumping in with both feet.
Oh, the title?....a striking similarity to lyrics to an alternative genre hit song from the 1980’s.
