IMG_1891.jpg

Rent vs. Sell Analysis: What to Consider Before Making a Decision

Steve Welty

There are qualitative and quantitative factors you need to consider when making a decision to rent or sell your property. I created two short videos that discuss both: 

  1. Rent vs Sell Part 1- Quantitative Analysis (the numbers)
  2. Rent vs Sell Part 2- Qualitative Analysis (the other factors)

On the quantitative side, I included a link to a spreadsheet you can use to plug numbers in for your particular situation and the data will tell you if renting or selling makes better financial sense. The spreadsheet is a bit technical, so if you need help reach out to me and I can walk you though it. Or you can show it to your CPA and they can assist you.

I hope this helps you make a more informed decision. Please let us know if you have questions or if we can assist you getting your property rented or sold. 

Rent vs Sell Part 1- Quantitative Analysis (the numbers)

Rent vs Sell Part 2- Qualitative Analysis (the other factors)

  1. What are your future housing plans?
    • Moving back
    • Renting new home, buying later
  2. Can you afford two properties?
    • Banks generally look for 6 months operating cash in the bank per property. I would say make sure you have at least 3 months liquid reserves per property.
    • Will you refi the rental or pull cash out to buy new home? If so, make sure you calculate accurate payment information on the rental.
    • Will negative cash flow impact your quality of life?
  3. How is the rental/sales market?
    • Improving or declining
  4. What is your tolerance for being a landlord?
    • DIY
    • Burn out
    • Good management
  5. What are the tax implications of selling?
    • 2 of the last 5 years rule
    • 1031

 

Most Popular Posts

Subscribe Here!