Should You Sell or Rent Your Home?

By Sheryl Landrum
Home Worth Columnist

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The housing industry is saturated with homes on the market; however, job promotionsor relocations, family growth, and other issues still crop up where we need torelocate to other areas. If you are finding yourself needing to sell your homein a market where housing prices are depressed, maybe you should consider rentingout your home instead?

Online Mortgage Calculators Can Help You Decide

If you bought a three bedroom, two bathroom condo for $250,000  three years ago and are considering whether to sell or rent you may lean towards  renting if your condo is worth less than you paid for it. Our online mortgage  calculator shows that a $250,000 condo purchase with 20% down and an interest  rate of 5.75% (a good rate for that time) results in a mortgage payment of  $1,167 for principal and interest. Property taxes are approximately $234 and  HOA fees will run approximately $150 giving you a total payment of $1,551.Could  you rent it for what you are paying?

 

Other Options to Consider When Renting or SellingYour Home

There are numerous tax deductions for landlords; not only  is mortgage interest a tax deduction for your rental, you get to deduct depreciation  and other expenses as well. Property appreciation is another consideration.  While pricing is depressed right now, historically homes do appreciate. "According  to the National Association of Realtors, "on the average, the value of a home  nearly doubles every 10 years."" In time the income you receive from renters  will probably not just pay your mortgage costs but add wealth to your portfolio  as well.

 However, your family still needs housing and those costs  need to be factored in as well. Can you buy another home if you don't sell  your condo? Again, going to one of the free online mortgage calculators can  help you crunch numbers and it is wise to consult a tax accountant as well.  Many people retire well with rentals they own and you could be one of them.  At least it is an option for those who are trying to sell their homes and are  facing a loss if they do so. Talk to your accountant and a real estate professional  to see if your best bet may be renting versus selling your home.

Source:
The San Diego Union-Tribune, Sunday, April 6, 2008, Renting  Instead of Selling: Can you Turn a Bigger Profit? By Greg Flaherty.

About the Author
Sheryl Landrum is a Loan Officer in San Diego, California and a freelance writer specializing in mortgage issues.