Deciding what to do with your house when you're ready to move can be a significant decision. Should you sell it and use the money for your next adventure, or keep it as a rental to build long-term wealth?

It's a common dilemma for many homeowners, and the answer isn't always straightforward. Whether you're curious about potential rental income or concerned about the responsibilities of being a landlord, there’s a lot to consider.

Here are some key questions to help you make the best decision for your situation.

Is Your House a Good Fit for Renting?

Even if you're interested in becoming a landlord, your current house might not be ideal for renting. Factors like moving far away, ongoing maintenance hassles, unsuitable neighborhoods for rentals, or needing significant repairs could make selling a better option.

Are You Ready for the Realities of Being a Landlord?

Managing a rental property isn't just about collecting rent checks. It's a time-consuming and sometimes challenging job.

For example, you may get calls from tenants at all hours of the day with maintenance requests. Or you may find a tenant causes damage you have to repair before the next lease starts. You may even have to deal with people falling behind on payments or breaking their lease early. Investopedia highlights:

"It isn’t difficult to find horror stories of landlords troubled with more headaches than profits. Before deciding to rent, consider talking to other landlords and doing a detailed cost analysis. You might find that selling your home is a better financial decision and less stressful.”

Do You Understand the Costs Involved?

If you're considering renting out your home primarily to generate extra income, remember that there are additional costs to plan for. As an article from Bankrate explains:

• Mortgage and Property Taxes: You still need to pay these expenses, even if the rent doesn't cover all of it.

• Insurance: Landlord insurance costs about 25% more than regular home insurance, and it's necessary to cover damages and injuries.

• Maintenance and Repairs: Plan to spend at least 1% of the home's value annually, more if the home is older.

• Finding a Tenant: This involves advertising costs and potentially paying for background checks.

• Vacancies: If the property sits empty between tenants, you'll lose rental income.

• Management and HOA Fees: A property manager can ease the burden, but typically charges about 10% of the rent. HOA fees are an additional cost too, if applicable.

Bottom Line

Deciding whether to sell or rent out your home is a personal decision that depends on your circumstances. Taking the time to evaluate your options will help you make the best choice for your future.

Make sure to weigh the pros and cons carefully and consult with professionals so you feel supported and informed as you make your decision. That’s what we’re here for at Lydia Gable Realty Group, your trusted Conejo Valley realtors.