Should I sell my property or rent it? This question arises often but it's not a one size fits all solution. Much will depend on your financial situation, your mindset and your time constraints.
If You Decide to Sell
Selling your home means you can transfer all your responsibilities to a new owner. We all know that owning two or more properties at once requires cash reserves and time. Therefore, selling will allow you to relocate without the burden of multiple mortgage payments and many other carrying costs. It will simplify your life because you won't have to worry about tenants, repairs or any other landlord issues. The down side is that you may miss out on the possibility of capital appreciation in the long run.
If You Decide to Rent
Renting out the home is an attractive and common alternative to selling. It's sometimes possible to rent out your property and make a profit every month while your tenants effectively pay for your mortgage. Rental income can cover most of the expenses to carry, such as mortgage, taxes and insurance payments. This is a great way to build wealth because at some point the house will be paid for by the tenant income and you will have built a nice retirement nest egg. Also renting instead of selling offers the possibility to move back if you are unsure that you will like your new place or if there is the possibility that your move could be a temporary one.
Renting brings further responsibilities, though, such as added expenses which you have to pay even if your tenants are late with their payments or skip them completely. There can be further costs such as breakdown of the furnace or air conditioner which would need to be replaced. Then there are maintenance, insurance and other associated landlord costs that need to be considered as well and the rent doesn't always cover all the expenses.
Another major downside of renting versus selling is the cost of possible damage to your property caused by the tenant. Sometimes you might have to evict a tenant which can be a hastle costing you a few months of unpaid rent.
Ultimately you have to have the time to manage a rental property which can be very time consuming and tedious. You can hire a property manager, but unless the property is substantial in size, it would not make economic sense.
Another disadantage to renting instead of selling is that your property will most likely not be kept in the same condition as it was when you were living there. Therefore if you ever need to sell it down the road, you will most likely get less than market value if your property does not show well. Compounding the problem is that your tenants may restrict viewings by potential buyers which will curtail momentum needed to get the highest price possible for the house.
The biggest consideration to renting instead of selling is that when you eventually decide to sell, you are nailed for capital gains tax from the time you start to rent the property until you sell it (if there is capital appreciation) and your rental income is also taxable.
What is best for you will depend on some of these factors and needs to be assessed in its totality. We would be happy to meet with you to discuss your options.