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:
- Rent vs Sell Part 1- Quantitative Analysis (the numbers)
- 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)
- What are your future housing plans?
- Moving back
- Renting new home, buying later
- 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?
- How is the rental/sales market?
- Improving or declining
- What is your tolerance for being a landlord?
- Burn out
- Good management
- What are the tax implications of selling?
- 2 of the last 5 years rule