While it can be tough to get the price you want for your house, especially in such an unpredictable market, you might find yourself not wanting—or not able—to wait for your appraised value to go up before moving. If you’re having trouble making the finances work, renting out your house is one short-term solution to look into. There are a few things to consider when you’re deciding if this might work for you.
Immediate financing: Even if you wouldn’t be able to sell your house for much, the amount you’d get from the sale is still something you might be counting on to help pay for your new house. If you’re going to rent out, make sure you can still come up with a decent deposit from somewhere else. In some cases you also might need to make different or more renovations than you would to sell, especially if you want to divide the place into apartments.
Long-term cash flow: Consider how much you’ll realistically be able to get in rent. It needs to be enough to cover the mortgage, upkeep, and other expenses. Consider whether it would seem like a good investment if you were buying the same house as a rental property. You might want to talk to an accountant or other financial advisor about whether or not renting out this house is a good deal.
The rental market in your area: Like with sales prices, you’ll need to check comps in your area to see what kind of rent you’ll be able to get. While you might want a higher amount or be afraid of getting “low-end” tenants, you shouldn’t price yourself out of the market. Think about whether renters in your area will be expecting a furnished house or paid utilities. You’ll also need to figure out if your neighbourhood and your house are likely to attract people interested in renting as opposed to buying.
Dealing with being a landlord: Unlike selling your house, you won’t be able to just walk away from a rental. You’ll need to worry about ongoing maintenance and upkeep, and the process of screening tenants can be a lot more work than finding a buyer, especially if you have high turnover. You’ll also need to make sure the lease paperwork is in order, which will be important for resolving some types of disputes that might come up.
If you’re stuck with an extra house you can’t or shouldn’t sell right now, renting is often a good solution. If you look over all of these areas and the idea of renting your old house seems to pencil out well, it can be a good way to hold out for the best sales price you can get down the road.
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