Over the past few weeks, we have been going back and forth about what we want to do with the home we currently own in Missouri.
I realize I say this all the time about everything in my life, but I am an extremely indecisive person.
This decision has been a difficult one so far, and we are still leaning either way depending on the day.
There are many reasons for why we are undecided about what to do next as well. So, what should I do? Should I rent or sell my house?
Below are some of the reasons for why we keep going back and forth about whether we should rent or sell our house:
We love our house again.
We’ve been fixing it up and have been slowly falling back in love with it. I know, this isn’t a good enough of a reason to keep a house and it seems like we are just coming up with excuses to keep it.
Some of the things we’ve done in the past few weeks include:
- The whole upstairs and downstairs have been completely professionally painted. Trim, walls, doors, etc. and it all looks so much better now.
- We’ve replaced a light fixture with something much nicer.
- We fixed all of the curtain rod placements to make the windows look bigger.
- We’ve bought new curtains.
- We’ve deep cleaned the whole house.
- We replaced the broken garage door with a nice carriage door.
- We replaced our back door with something nicer as the last one had a cracked door frame after someone got locked out of our home.
All of these improvements have made us wonder a little more about what we should do with our home. We know we should probably just get rid of it and sell it, but the fact that it looks so much better than before definitely hurts a little!
I realize this is normal though when someone goes through preparing a house to be put on the market.
Our neighborhood’s value has tanked.
I’m not sure what has happened, but our neighborhood’s value has tanked significantly over the past year.
Our realtor already told us that we most likely either breakeven or we will owe a little money after selling our home because of realtor fees and the lower value of our house, so this is playing a big factor into whether or not we want to put our house on the market at the moment.
There is risk with this though. Our home value could continue to plummet. I doubt that would happen as it seems like the plummeting has stopped, but you just never know.
We could turn our home into a rental.
One factor that’s throwing me in a loop about whether I should I rent or sell my house is that we could potentially rent it out for the time being.
We are debating renting out our home, either on a long-term or on a short-term basis. Renting would be great because we could see if our house increases in value over time, while hopefully earning enough money to still pay off our mortgage each month. Another positive of this is that we would have a home to return to if we decided down the line that the move was not right for us.
A long-term rental would be nice because we would earn enough to cover our rent with hopefully minimal work involved.
On the other hand, we could also do more research into renting out our home on a short-term basis on a website such as Airbnb, VRBO or Homeaway. This would also allow us to have a place to come back to since we know that we already have to be back in the St. Louis area at least four more times this year.
Having a rental would require work.
In the end, we will probably just sell our home. However, if it sits on the market for a long time then renting it out will probably become more appealing.
Keeping our home on the side most likely wouldn’t be worth it. We would mainly be keeping it for all of the wrong reasons, mainly just that we are attached to the first home we bought.
What would you do in our situation? Should I rent or sell my house?
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It is an hard choiche, you could rent or sell, but you must to understand which is best solution for you, if you are going to came back in Missuri, rent it, and probably in the years house will have higher value,I know that you’ll do right choiche for you. Think about what is best deal for you and not for market!!!
Thanks G! 🙂
I would say sell it for sure! It would be the best i think. I say keep positive thoughts and energy, and hope it sells pretty quickly, so you can avoid the rental option, my dad had a rental, and it was extra money for him, but i know he didn’t care to much for the extra work involved, he had it for a several years though before he sold it. Good luck to you in whatever choice you decide.
Thanks Nicole!
I often see clients with debt problems who have kept a previous house because the price had fallen. My standard advice to anyone in this situation is only keep the house if:
A) the rent will be larger than your mortgage (and allow for your mortgage going up a couple of per cent if your mortgage rate isn’t fixed). PLUS any agents fees if you won’t be close enough to sort out any tenants problems yourself PLUS 10% to go into a fund for repairs PLUS another 10% to be put aside to cover any void periods.
and
B) you have several thousand dollars of accessible savings in case of real problems with your rental. If your tenant stops paying the rent, you may have to take legal action to evict them and for months you won’t get any rent. You will be unlucky if the tenant trashes the place, but your finances have to be good enough so this is highly annoying and not a disaster.
If it doesn’t sell quickly, drop the price. This is the worst of all reasons for keeping a property to let!
We can easily afford to keep the house on the side, and I guess that’s why we keep going back and forth with the decision.
I would rent for a while and see how you like it. It probably would work better if you hired an agency to take care of it. You can’t go wrong with real estate if you do it right. Nothing wrong with putting some extra income in your pocket.
We’ve decided to list it for now and see where that takes us. If it doesn’t sell or the prices keep dropping then we are going to most likely rent it out.
When we hit FI and travel, we plan on renting out our home while we’re gone (for a couple of years at least, probably). For us, it’s not worth it to sell since it’s a great “base camp” and by then will be exactly the kind of home we want to live in forever, designed to our specifications.
But if you’re not planning on St Louis being your forever location, selling it now and not having to worry about the rental (especially short term – those are very work intensive!) is probably the easiest thing to do.
Yeah, we’re not sure if we will ever come back to St. Louis, so that is a big factor of ours for why we should just sell it.
Unfortunately, when it’s your home you can’t just base your decision on nice neat numbers – there are emotions that sneak in there, too.
The big question is: how would you feel if you rented your ‘home’ and the tenants trashed it? Rentals are much easier to manage when they are just ‘houses’ and not your home.
I don’t envy you your choice. It’s a tough one.
Good luck!
Yeah that’s the thing, I don’t know of many people personally who have had good landlord situations in the St. Louis area – it always seems to go badly and I would definitely be sad!
Being a landlord can be a huge pain in the behind. And you’re going to be far away. I agree that the right solution would require enough rent to pay some sort of agent [even if it’s VRBO rentals] and should cover repairs as needed [everythings fine now? Great, what happens when the tenant lets it’s pet iguana do it’s thing all over the carpets?] and a very well referenced agent. Can’t find one? SELL
It’s hard to take that hit when you think there can be gold in holding on – but it just doesn’t pay if it’s going to give you gray hair
Yeah, I definitely don’t want too much added stress from it.
Renting it out seems like opening a can of worms to me, especially if the tenants don’t pay or trash it. And being a long distance land lord, it’s hard to keep track of that. I would want a nice clean break and more freedom rather than take my chances. If you had moved out of state, would you borrow money to buy this home with the intention of renting it from another state? If not, it’s not worth it. Good luck!
Very true, but renting it out in hopes of the market going back up is something we keep thinking about.
Renting is not for everyone, especially if you are going to be so far away from your house.
Yes, that’s what we are thinking.
Very hard decision!! It seems like you’re more leaning towards selling it, and I think you should go with your instinct. While renting can be a great income stream, it can also come with a huge headache!! We debated renting our house in AZ before moving to NC, but ultimately decided it would have been too hard to be a landlord from across the country. I do want to get into rental properties one day, but preferably they will be in the same state I’m residing in!
Best of luck, Michelle!!
Thanks Sarah!
Sell it. Don’t look at what could have been. It will be a PITA.
That’s what we are going to try to do 🙂
Dave Ramsey doesn’t recommend being a landlord to a house that’s more than easy driving distance away. He’s a bit controversial but I think his net worth (from real estate) was about $7 million before the age of 30. I like his real estate advice. You can always hire a management company like FIfighter does. All-in-all I don’t think having a physical property matches your free lifestyle very well! But from the few pics I’ve seen, your house does look really nice!
Well, we do want to eventually get into rental real estate. I’m just not sure we are ready to do it just yet.
My house has been rented out for the past year and a half, and it’s been fine! Housing still seems to be recovering in Orlando, so if I were to sell it I wouldn’t make any money. I am ok with holding onto it- it’s been low maintenance. I like the idea of someone else paying the mortgage on it! I invested in a home warranty that covers the cost if something were to break or need fixed.
This is great to hear 🙂
This is a tough decision, especially since values have dropped. Seeing as you just fixed up your house, I’d probably try to sell and see how it goes. Managing a rental from afar is probably not something I’d take on right now myself.
Yeah, that’s what we are going to try for now. Wish us luck!
We’re in the same boat, considering selling our home that’s currently a rental. We got an updated appraisal on it and thanks to foreclosures in the neighborhood, the value has dropped by $42,000 in the last 4 years. I wasn’t really set on selling it until I realized that. At this point, we really just want to get out from under it!
That’s pretty much what happened to us 🙁