If you own two homes, you might consider renting one as you stay on the other. This can be a decent financial move considering that you will be building wealth through cash flow and equity. There is also the option of selling one and keeping the other. Making the right move can be challenging at times. Should I sell the house? Should I keep it? The primary challenge facing homeowners is identifying the opportune time to make the right move. That said, here are some questions to ask before deciding whether to rent or sell your home.
What is the expected impact on my cash flow?
Some math should guide the decision to sell or rent your home. As such, you need to have a clear idea of the impact of the decision on your cash flow. For instance, before renting it out, you need to look at all associated expenses against the income generated. If the calculations suggest that you would have to get back to your pocket, you should consider selling it.
What is the return on investment?
How much money would you gain if you sold the property today? This is one of the most important considerations for an investor. As such, if selling now would mean getting close to nothing, the best thing to do is to hold onto it expecting its value to appreciate. For instance, if you can make a profit of $50,000 by selling or a positive cash flow of about $2,000 per year from renting, it is better to take the 100, 000 and invest in something else that could provide you with better results.
How does the future look like?
It is important to understand the market you are in. Based on the location of your home, you should be in a position telling the prospects for your neighborhood. If the next couple of years look promising, you should consider renting or keeping it. Of course, you cannot have a definite answer, but you can always make an informed prediction based on what is happening now. Look at things like business trends, types of houses being built, amenities, and other things that attract human populations.
The real estate market can allow you to keep both the old and the new. However, the decision to keep them or sell is entirely yours. If you are thinking of the best possible move, the considerations outlined above can help you make the right decision.