Deciding the fate of your home when it's time to embark on a new journey can be an exciting decision-making process. Are you going to sell it and fund your next adventure, or retain it as a rental property contributing to your long-term wealth?

This question is common among homeowners and the answer isn't always simple. Whether you're intrigued by the potential income from renting or contemplating the duties that come with being a landlord, there’s plenty to ponder.

Let’s explore some essential questions to help you make the most suitable decision for your circumstances.

Is Your House Suitable For Renting?

Even if you're keen on becoming a landlord, your current house might not be the perfect fit for renting. Perhaps you're relocating far away, and maintaining the property could be a challenge, the neighborhood isn't attractive for rentals, or the house needs considerable repairs before renting it out.

If any of these factors resonate with your situation, selling might be the most beneficial choice.

Are You Prepared for the Responsibilities of Being a Landlord?

The job of managing a rental property extends beyond receiving rent checks. It can be quite engaging and at times demanding.

For instance, you may receive calls from tenants at any time requesting maintenance. Or you might have to repair damage inflicted by a tenant before the next lease commences. Dealing with tenants who delay payments or terminate their lease prematurely is another possibility. As Investopedia points out:

"Stories of landlords struggling with more headaches than profits are not hard to come by. Before deciding to rent, consider talking to other landlords and conducting an in-depth cost analysis. You might find that selling your home is a financially sounder and less stressful decision.”

Do You Have a Clear Idea of the Costs Involved?

If your primary motivation for renting out your home is to generate additional income, bear in mind that there are extra costs to anticipate. As Bankrate's article elaborates:

Mortgage and Property Taxes: These expenses persist even if the rent doesn't cover all of them.

Insurance: Landlord insurance, necessary to cover damages and injuries, costs about 25% more than standard home insurance.

Maintenance and Repairs: Annually, anticipate spending at least 1% of the home's value, higher if the home is older.

Finding a Tenant: This process involves advertising costs and possibly the cost of background checks.

Vacancies: If the property stays vacant between tenants, you'll miss out on rental income.

Management and HOA Fees: A property manager can alleviate the workload, but typically charges about 10% of the rent. HOA fees also add to the cost if applicable.

Conclusion

In summary, whether you choose to sell or rent out your home is a personal decision that relies on your individual circumstances. Regardless of your choice, allocating time to assess your options will assist you in making the best decision for your future.

Consider the advantages and disadvantages thoroughly and seek professional advice to ensure you are well-guided and knowledgeable as you make your decision. A real estate agent can provide valuable insights.