CHAPTER 2 To Rent or To Sell? That is the Question
The decision whether to rent out or to sell a vacant home often arises in residential real estate sales transactions. Real estate is a prime investment. For most Americans, it is their largest investment, with the equity built up in the home of genuine importance in retirement planning. It may be an attractive proposition either for long-term investment or immediate cash flow if a homeowner has the opportunity (and financial ability) to become a landlord and rent out a home while affording another. A family may arrive at a point where more room is needed, or a change of location desired, or a new job requires a relocation causing someone to move, yet rent their house to tenants. Other situations where it might be more practical to rent out rather than sell out could involve a home that has languished on the market or where the owner is “under water,” the mortgage being more than the home value. By 2016, American home prices had recovered nearly all the losses from the 2006 downturn. In February, 2021, nationwide home prices grew 12% year-over- year — their fastest pace since 2006. Separately, CoreLogic's home-price index also recorded the highest annual leap since 2006, in February, 2021. Renting your home versus selling has many factors to consider. For example, is real estate a good investment in the overall economy? Is the housing market in general moving up or down? If you wait two or three years, will you see substantial 3
Powered by FlippingBook