managers to get their perspective on pricing. If it turns out that you cannot cover your mortgage with the projected rent, then calculate how much of a loss you can take to be still able to afford to rent the house. In addition to mortgage payments, there are taxes, upkeep, and utilities to consider.
Your home-sale situation
Your own economic circumstances may influence whether you decide to rent your home or sell it. Some sellers must evaluate whether they can afford to sell their home. If not, renting is a viable alternative. Here is an example of a situation where a couple had to assess the affordability of selling their house. The couple lives in an area where house values have declined since the peak in 2006, the same year their house was purchased. As they debated whether to sell their home in 2011, they realized that if they chose to sell, they would incur a $50,000 cash loss, excluding closing costs. They looked at the numbers and decided they could not afford to sell their home. For them, it made more sense to rent their home and purchase a second home. When you rent, you may incur a monthly loss, but you do not have to come up with the cash to satisfy the loan immediately upon sale. If you sell at a loss, then there is no tax benefit. The couple bought some time for real estate prices to recover further.
Beneficial tax deductions of renting a home
For homeowners seeking tax deductions, there are benefits to renting out their house rather than selling it. You can deduct expenses related to owning and managing your property when you rent it. This includes mortgage interest payments, insurance, property taxes, maintenance, fixtures, cleaning services, and even travel and local transportation expenses incurred in maintaining and managing the property, as well as rent
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