When your current home no longer suits you, it’s obvious to wonder whether to sell or rent it out. This is a common dilemma faced by homeowners when they decide to move to another house.
There may be any reason to change your existing home- your kids are growing up and you may want to upgrade to a larger house. Or maybe your children are moving out and now you don’t need a large residence. Also, chances are your job requires you to relocate to another city for a few years. Whatever the situation is, you need an answer to one big question- what to do with your property. The obvious answer to this question depends on various factors, such as your personal needs, temperament to become a landlord, type and condition of the home, amount of mortgage, and renting market of your area.
Selling the current house is a popular option among many homeowners; however, turning it into a rental home might make more sense. This is because the benefits of renting oftentimes outweigh the advantages of selling your property. And here are the reasons why renting is the best option for homeowners.
- Generate Cash Flow
Unlike stocks, rental income generates real cash. When you rent out your property, you can enjoy some monthly cash flow. There are limitless expenses that you have to meet, especially when you have kids. When you get some additional few hundred dollars every month, it can help you pay for such never-ending expenses.
- Tax Benefits
If you own a rental property, you can get some tax benefits such as deductions and depreciation that can offset your losses elsewhere. The landlords can write off all of the expenses they incur on their rental property like utilities, repairs, mortgage interest, and property taxes.
- Benefits of Investment Property
Rental property is a great investment and an ideal way to experiment as an investor. The loan taken by investors carries a higher rate of interest and down payment. But as an owner of the home, you would have secured a much competitive loan. If you always thought of owning an investment property, it is best to rent out your house.
- The benefit of Increasing Property Values
Investment in properties is considered safest because the value of properties increases over time. The market may face a temporary slump but eventually, it recovers. This property can provide you a security blanket and you always have an option to sell it in future when you’re in serious need of money. Even if you have a loan on the property, you can pay the mortgage with the rent while the value of your property will keep on increasing. It is seen that property owners turned landlords always reap the benefits of larger returns and extra cash as the market prices surge.
- Protection against Inflation
When the economy is hit with inflation, the price of every commodity goes up. But as a landlord, this can be a beneficial situation for you. Just like other goods, the price of rent also goes up which means you can pocket more monthly income. A rental property is a safe investment and profitable asset because it gains value when inflation is high and creates cash flow from renting during any economic period.