Nancy Puder

How to Decide Whether to Sell or Rent Your Home

On The Market
By Nancy Puder

Nancy PuderWhen its time to make a move because your current home is no longer the best fit, most homeowners decide to sell. Others, however, make the decision to keep their property and rent it out.

Here are 6 factors to consider when making the “sell vs. rent my home” decision.

1. Know Your Financial Position
Check with a lender to see if you qualify to finance the new home while continuing to be liable for the mortgage on the old one.  Ask yourself if you could pay the mortgage on the “rental property” for 2-3 months in the event of a vacancy.  If you cannot answer yes to that question, than you should probably sell.

2. Local Market Rents
Check the local ads to see what homes like yours are renting for in the area.  Even better, check with a property manager.  A good one will let you know how much you can rent the property for and not charge you for that information.

3. Do You Have Landlord Tolerance?
When someone lives in your home, they can scuff the walls, burn the countertops and forget to water your prized shrubberies. If you can’t live with that wear and tear, you should sell rather than rent your home.  You will be the one to get the bills when there are plumbing and other on-going repairs needed.  If paying for up keep is going to cause you to panic, opt to sell your house vs. renting it to save your sanity. You can save many of these headaches by using a property manager, but this, of course, will cost you and you will need to factor that expense into your decision.

4.Will the Rent Cover the Mortgage Payment and Expenses?
If the answer is yes, keeping your house can be a smart way to help fund your retirement. For each month your tenants pays rent, you likely won’t pay tax on that income if you have enough expenses to offset it (like mortgage interest and repair costs).  When you finish paying off your mortgage or once you retire, you can sell the house and convert your equity into a lump sum, or continue renting it and collecting income during your retirement.

5. Tax Benefits
When you rent your home instead of selling, you get to depreciate it for tax purposes. In most cases, you divide the amount you paid for the house, plus the cost of major improvements (less the value of the land) by 27.5 (that’s how many years the tax law says a house must be depreciated) to arrive at your annual depreciation.

For example, if you paid $100,000 for the house, and the portion allocated to the land is $20,000, you get to deduct $2,909 in depreciation annually ($80,000/27.5). Along with this, you can deduct other expenses, such as property taxes, repairs, and community association fees. You should check with your tax professional regarding your own situation

6. Possible Need For Eviction
If you wouldn’t have the heart to force out a renter who didn’t pay, you shouldn’t become a landlord. If you do become a landlord, let a professional company manage your property. Even then, you will have to be the one to make the decision to evict or not.  Keep in mind that it will cost you for an eviction proceeding.

Nancy Puder is a real estate broker with Nancy Puder & Associates, the premier real estate boutique company in Arroyo Grande, CA. Nancy Puder is one of the largest listing brokers on the Central Coast. Call or text Nancy 710-2415 with your questions anytime. She always enjoys hearing from you!  To access other real estate articles written by Nancy Puder, go to  or email