The average American will stay in their home approximately ten years before moving for one reason or another. If you are currently a first-time buyer and living in a condo or smaller single-family residence, the life span will likely be even shorter. Conversely, if you’re facing retirement age, downsizing may be looming on the horizon. Moreover, you may gain a second home through inheritance and have no interest in living in it yourself.

Whatever the circumstances, if you are moving, the question of what to do with a property may be a pressing concern. Will you be better off selling the house or renting it? That is the question. While renting may be lucrative, it also comes with a fair amount of responsibility and risk. Consider the following factors in making the best decision for you.

Will the Property Provide Positive Income?

The first thing to consider is whether the local market will support the amount of rent you need to collect each and every month. In other words, once you establish what amount of rent the neighborhood will support, and you deduct all of the expenses associated with the property (mortgage, taxes, insurance, utilities, management, vacancy, repairs, HOAs, etc.), will the property produce a monthly profit or a loss? If you are looking at a loss, consider selling. Property appreciation may not offset monthly losses incurred due to a weak rental market.

Is it Worth it?

Find out what your property would be worth if you sell. If there is equity in the property a large lump sum invested elsewhere may yield a higher return in the long term. On the other hand, it may not make sense to sell if your mortgage balance is near the value. You will also need to account for settlement and realtor brokerage fees of about 10 percent if you intend to sell your house on the retail market. An alternative to a real estate brokerage is to sell to a real estate investor. They tend to purchase homes at wholesale, as-is, without any fees. However, if the property will produce positive cashflow as a rental, renting could be a good way to let equity build while the market improves.

Look to The Future?

Looking out several years, what is the value forecast in your neighborhood? Are values increasing, staying the same, or decreasing? Will your immediate neighborhood decline in value over the next few years? If the future looks dark, consider selling now to avoid problems later on.

Of course, speculation is not easy, but gauging where the market is going isn’t impossible either. Consider the growth of your city, is sprawl moving toward you or away? Are nearby homeowners taking care of their properties, or are they falling into disrepair? Are there any new developments nearby? Although it isn’t an exact science, analyzing market trends will help you make a better-informed decision as to whether to sell or rent.

Are You Prepared to Deal with Bad Tenants?

Honestly, many homeowners are not prepared to deal with bad tenants. Are you? It is true that most tenants are easy, but others require an extraordinary amount of patience. In worst case scenarios, you may be forced to handle evictions. Or, image your tenant uses the premises to engage in illegal activities.

Ordering credit and background checks on each applicant is a good place to start, but may not always reveal every problem. Remember, when showing the property to a prospective renter, your job is not to sell the home, but to interview the prospect.

Many first-time landlords as well as seasoned ones use professional property management companies. They are common to most every locality. Finding the right management company can mean everything in reducing your stress level. They typically charge about 10 percent of the monthly rent so this must be taken into account when considering whether to rent or sell.

So, Should You Rent or Sell Your House?

Deciding whether to rent out your house or sell it is a choice only you can make after weighing all the options. Consider the four factors outlined above and make the choice that works best for you, your family, and your financial future. Try and look at worst-case scenarios, tenant damage, illegal use of the home, the cost and stress associated with evictions. If after careful consideration your decision is to sell, contact RealtyWithRich, we help homeowners is any situation and charge no fees.