Should You Keep Your Home as a Rental Property? Pros and Cons

Making the decision to move to a new home is a big one. You need to consider all kinds of things, like the size, location, and whether it comes with the right amenities. But you shouldn’t forget about your old home just yet – you have a few important decisions to make with this one too! For example, should you keep your home as a rental property, or sell it for a tidy profit?

Both options have their pros and cons, so it’s important to weigh them carefully before deciding what’s right for you. In this blog post, we will explore the benefits of keeping your first home as a rental property and the drawbacks of doing so to help you make your decision.

Pros of Keeping Your First Home as a Rental Property

Let’s start with the good stuff. If you choose to hold onto your first home as a rental property, you’ll have the chance to enjoy the following benefits:

Steady Income Stream

One of the biggest advantages of keeping your first home as a rental property is the potential for a steady income stream. Renting out your property can provide you with monthly rental payments that can help offset your mortgage. Or better yet, generate additional income.

Long-Term Investment

Real estate continues to be a solid long-term investment. So, by holding onto your first home as a rental property, you’re holding onto an asset that has the potential to appreciate over time. This can provide you with financial security and wealth-building opportunities in the future.

Tax Benefits

Renting out your first home also comes with potential tax benefits. In the right situation, you can deduct expenses related to managing and maintaining the property, such as repairs, maintenance, insurance, and property taxes. These deductions can help lower your overall tax bill, and it’s hard to argue with that!

Cons of Keeping Your First Home as a Rental Property

There’s a lot to like about renting out vs selling your first home, but that doesn’t mean it’s right for you. Here are some of the reasons you may want to consider selling instead:

Property Management Responsibilities

Being a landlord comes with its own set of responsibilities. From finding tenants and collecting rent to handling maintenance issues and dealing with tenant complaints, there can be a lot that goes into managing a rental property. If you aren’t prepared for these responsibilities, it could become overwhelming.

Market Risks

In a constantly fluctuating real estate market, there’s always some risk involved in owning rental properties. Anything from economic downturns to changes in neighborhood demographics to unexpected repairs can impact the value and profitability of your first home as a rental property.

Vacancy Risk

Of course, there’s always the risk of experiencing periods of vacancy where your property is not generating any rental income. Tenantless properties can be costly for landlords as they still need to cover mortgage payments and other expenses while waiting for new tenants.

The Bottom Line

Deciding whether to keep your first home as a rental property or sell it isn’t easy. Both options have their own set of pros and cons that need careful consideration before taking action.

So, it’s important to weigh your personal goals, financial situation, and risk tolerance when making this decision. And if you need a hand, don’t hesitate to consult with a real estate professional. They’ll be able to assess the potential outcomes of both options and help you determine what makes the most sense for you.

In the meantime, be sure to carefully weigh your options before making a choice. Whatever decision you make, trust that it’s the right one for you and your future goals. Good luck!

Need a hand deciding if selling or renting is a better option for you? If so, we’d be happy to help! Click here to get in touch with Hawkins/Ryerse Real Estate Group, and speak with one of our experts today.