Are you planning to move into a new home? What are you planning to do with your current house?

If you own your current home, you have multiple options moving forward. You could go the traditional route and sell your home, done deal.

On the other hand, you could rent your house out to tenants to establish a passive stream of income. But is it worth the extra work involved?

Both options have merits. If you’re wondering, “Should I sell my house or rent it out?” we can help you come to a solution.

Keep reading for everything you need to know about renting out a house for the first time versus selling it.

The Pros and Cons of Selling Your House

If you’ve built up a lot of equity in the home, you stand to make a sizeable profit by selling your home. Of course, selling your home has several fees you need to account for, such as:

— Realtor fees (3-6% of the sale price)

— Closing costs (3% of the sale price)

— Home selling preparations ($21,000 on average)

— Staging costs

— Professional cleaning costs

— And more

Depending on the value of your house and what preparations you invest in, these costs can easily add up to over $50,000.

However, if you don’t want to become a landlord, the answer to “Should I sell my house or rent it out?” is straightforward. Selling your house will permanently close this chapter of your life without leaving you with any extra responsibilities. Take the positive equity you’ve gained and apply it to your new home, debt, or any other investment.

The Pros and Cons of Renting Your House Out

Now, let’s look at the benefits and disadvantages of learning how to rent out a house. If you choose not to sell your home, renting it out to tenants is a great way to develop a stream of passive income.

Their monthly rent check can cover your mortgage payment and then some. Once the home is paid off, rent checks can go directly into your savings account.

However, if you’re asking “Should I sell my house or rent it out?” the answer may lie in your financial credibility. Some people can’t get approved for a second mortgage.

If holding onto your current house makes your debt to income ratio too high, you won’t be able to buy another home. It can also affect your eligibility for lease agreements, auto loans, credit cards, and more.

You also need to consider your duties and responsibilities as a landlord. Although, you can hire property management services to handle things like:

— Property listings

— Tenant screenings

— Rent collection

— Repairs and maintenance

— Eviction notices

— Inspections

— And more

Property managers make it easy for first-time landlords to maintain their properties and manage their tenants.

Should I Sell My House or Rent It Out?

At the end of the day, you have to make the best decision for your circumstances. If you’re eligible for a second loan and don’t mind becoming a landlord, your decision to rent or sell a house is wide open. If renting your home will complicate your life and add undue stress, sell it.

Only you can answer “Should I sell my house or rent it out?” but we hope this article helps you come to the right decision.

For more real estate tips and homeowner advice, you’re in the right place. Before you go, take a look through some of our other blog articles to find more insight to help you live your best life.