Better to Rent Or List Your Home for Sale? 3 Question Litmus Test
This seems to be a FAQ these days. As a property manager in Charlotte, we get many calls from people asking themselves this question.
I didn’t think there was a one-size-fits-all answer to this, but I was corrected. It just seems to come down to who you ask. If you ask a:
1. Realtor: “You should definitely put your house on the market! Interest rates are at all-time lows!”
2. Property Managers: “Nothing is selling in this market. You can either eat your mortgage every month as it sits or have a respectful renter pay it for you.”
So which is the right answer?
It really depends on your answers to these 3 questions:
- If you wanted to live in the area your home is located, would you buy your home at the price it would be listed at? Take an honest look at comparable homes for sale in our area. If “yes”, list. If “no”, rent.
- Does your house have a differentiator that would make it more appealing than cheaper, comparable houses (aka foreclosures and short sales)? If “yes”, list. If “no”, rent.
- Can you stomach a possible rogue renter and locking into a negative cash flow for a year or two? If “yes”, rent. If “no”, list.
These questions make it easy and really boil down to a simple question:
Is your home among the best of the best?
If not, it’s like trying to sell your clothes retail when everyone else is having a 50% off sale. If your home is special and you can communicate this effectively in your marketing, then list your home for sale and be confident it will sell. If it is not, then you must rent until banks starting lending to the masses again.