With the market in a frenzy these days, many that may need to move out of the Springfield and Burke areas are wondering what the right answer is between selling vs renting.

Obviously, there are pros and cons to both. If you go the rental route, you could keep your asset and make some money each month; though you may also have to deal with late rent or get stuck with a property that becomes too expensive or time-consuming to manage. Selling too soon, on the other hand, can at times be just as risky, causing you to forfeit sizable equity in a fast-appreciating property. 

Should you be selling vs renting? Here are some tips for making your decision.

Tips for Deciding Between Selling vs Renting

Renting Makes Sense If The Money Adds Up

2020 has seen many economic ups and downs. The housing market, however, has maintained surprising strength. And this includes rentals, though many landlords have reported being burned by the pandemic’s missed rent payments and eviction moratoriums. 

Outside of most major cities, rental incomes have risen or remained steady, and property managers are enthusiastic about the state of the market in the Northern Virginia suburbs heading into 2021, although average rental rates decreased by 1% over the last year.

Additionally, while Springfield’s single-family homes may be prime candidates for lucrative rental income, this area doesn’t traditionally see a lot of that; an almost two-thirds majority, 63%, of Springfield homes are owner-occupied.

If you still think rental is the way to go, consider the financial aspects of selling vs renting to be sure that it makes sense to take on a tenant. 

Are you confident that you could make a profit or at least cover your costs?

As a landlord, you’d want the rental fee not only to cover the mortgage expenses, but also property taxes and insurance, as well as any expenses for hiring a property manager and making inevitable repairs. Also, there may be months that the property sits empty, so you may need to factor in the cost of vacancy as well. 

By renting your property, it could take you years — or even decades — to make the same amount that you could likely get from selling in the current market. This can make the decision between selling vs renting even harder.

Selling Makes Sense To Free Up Liquid Assets

If there’s something everyone agrees on right now, it’s that it’s a seller’s market. This means that if you decide to sell, your home will receive a lot of attention and maximized value — especially if you’ve worked with an agent to price and market it well. 

This translates to higher sales prices and hopefully more profit for home sellers. In this case, selling vs renting means you should sell, not rent your home.

Selling Makes Sense if You Need Money for a Down Payment 

Selling offers you the opportunity to gain liquid cash on hand. When it comes to selling vs renting, if you need money now, selling is the better option.

If you need cash for a down payment on your next home and you have a big chunk of equity in your current home, selling will likely help you reach your goals faster than renting.

Selling Makes Sense in Your Home is Older 

There is always some degree of regular maintenance to be expected when you manage a rental. There is also a degree of increased regular maintenance when a home is older.  Add the two together and imagine how much higher average maintenance costs skew for older homes.  

If the age of your property raises maintenance costs and concerns, you might prefer to forego any major fixes and go ahead and sell your home as-is in the current hot market. When deciding between selling vs renting, maintenance will play a factor.

Selling Makes Sense if The Idea of Being a Landlord is Unappealing

While renting out your property can be a solid source of cash flow, it also can be a drain. And even if profitable, that comes at a price! Hiring a management company alleviates some rental property headaches, but can come with a bill that eats into your profits. And if you decide to manage your property on your own, you’ll want to be aware of all of the responsibilities that entails.

If the time, expense, and liability of being a landlord sounds unappealing, selling is definitely the better option.

Selling Makes Sense if the Money is Better 

Because in the end, it really all comes down to numbers when choosing between selling vs renting.

Figure out how much you can earn by selling and compare it to how long it will take you to make that same amount by renting out the property. Then, decide if the monthly income is worth the potential rental hassles.

If yours is one of the small percentages of Springfield and Burke single-family homes that can rent for a profit, you should do it! If not, LIST WITH ELIZABETH® would be pleased to talk with you about how to start preparing your home for its best market value.