Should I Sell or Rent My Home in 2021
Many homeowners consider renting out a home they need to move out of instead of selling. What are some of the pros and cons of selling the home vs renting the home out?
1. The Mortgage Will get Paid off at closing.
- There is no need to refinance one or the other spouse out unless the Divorce Decree mandates it
- Both in Title:
- Both must Agree
- Both must Sign
A Homeowner should consider keeping it in some situations but others could lead to disaster..
- Need Net Proceeds – Sell
- Not Returning to Area – Sell
- No Experience with Rentals and Leaving – Sell
Let’s Start with it you need the money out of your home…
- You can take a home equity line of credit
- But the numbers have to make sense.
- Great website called:
- Investment Calculator
Legal Aspect of Owning a Rental
- Lease Agreements
- Handling Deposits
- Handling Repairs and Maintenance
- Handling Evictions
What are some other issues that homeowners should consider when deciding whether or not to sell a home or rent it out?
- Repairs and maintenance
- You need a cash buffer for ‘murphy’
- Tenants are not too good at:
- Caring for landscaping
- Mechanical systems
- Neighborhood Rules
- Tax consequences
- If you lived in it 2 of the last 5 years ok
- After that, you may have to pay Capital Gains
- Some people use what is called a 1031 exchange. But…Biden may be eliminating that tax deferral.
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