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What are the pros and cons of renting out my first home instead of selling it when upgrading to a new property?
Renting out your home can provide a potential annual income of $30,000 or more, depending on the location and rent amount.
According to a study by the Joint Center for Housing Studies, about 30% of homeowners who move to a new home choose to rent out their previous home instead of selling it.
Renting out your home can provide a new source of income, which can help offset the mortgage payments on your new home.
As a landlord, you can deduct mortgage interest, property taxes, insurance, and maintenance costs from your taxable income, reducing your tax liability.
The condition of your home matters less to potential renters than buyers, so if your home needs repairs, renting might be a better option.
According to Zillow, the median rental price for a one-bedroom apartment in the United States is $1,410, and for a two-bedroom apartment, it's $1,746.
If you're planning to sell your home in a buyer's market, renting it out can be a safer option to avoid losing money on the sale.
Renting out your home can also provide a hedge against inflation, as rental income can increase with inflation.
To successfully rent out your home, you'll need to take high-quality photos, set a competitive rent price, and write a detailed description of the property.
As a landlord, you'll be responsible for finding tenants, collecting rent, and handling maintenance and repairs, which can be time-consuming.
If you're not prepared to deal with the responsibilities of being a landlord, you may want to consider hiring a property management company to handle the day-to-day tasks.
According to Chris Sayers, a real estate expert, if your home will rent for at least $2,500 per month, it might be better to rent it out instead of selling it.
If you decide to rent out your home, you'll need to obtain landlord insurance, which can cost around $1,000 to $2,000 per year.
As a landlord, you'll need to comply with local landlord-tenant laws, which can vary by state and even city.
Renting out your home can provide a sense of security, as you'll still own the property even if the housing market fluctuates.
According to HomeLight, the key factors to consider when deciding to rent out your home include the condition of the property, the local housing market, and your own financial situation.
Renting out your home can be a good option if you want to wait and see how the housing market develops before selling.
To successfully rent out your home, you'll need to price it competitively, which means researching the local rental market to determine a fair rent amount.
If you're renting out your home, you'll need to prepare for potential vacancies, which can impact your cash flow.
According to Kiplinger, if selling your home would mean giving up a low mortgage rate, consider renting it out instead.
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