_yVZU15bGR.jpeg?updatedAt=1716813546115&tr=w-280,dpr-auto,bl-6)
Should I Sell My House Or Rent It Out? The Definitive Answer To The Dilemma
Depending on the economy, your personal financial situation, your moving timeline, and your immediate personal needs, it may be beneficial to rent rather than sell your property. However, deciding on whether to cash out your equity or enjoy a stream of passive income requires careful consideration and a deeper understanding of the pros and cons of holding real estate as an investment.
Most people who are not in an immediate hurry, and find themselves pondering “Should I sell or I rent” come up with what may seem like the logical conclusion at first: to go for both, create two separate listings, one for sale, one for rent, and roll with the earliest outcome. However, this is not as simple as it sounds, as it comes with additional layers of complexities that can ultimately land you in a world of trouble if you don’t first think them through, and in certain situations, it’s not possible to list a home for sale with an agent, while simultaneously listing it for rent with a property manager. Make sure you check out local real estate rules and regulations or reach out to a local real estate expert to help navigate these situations.
In this article, we’ll go over whether listing a property both for rent and sale at the same time is a good idea, and share our advice on how to get started with it if you choose to go for both listings simultaneously.
When Should You Consider Selling Your Property?
Owning a rental property typically tends to be a lucrative investment over the long term. However, being a landlord is no cakewalk and involves a lot more work and capital than people give it credit for. As such, it’s natural for homeowners who’ve owned a primary residence for a long time to ask themselves “Should I sell my house or rent it out?”.
For a home to remain in good condition and attractive for prospective tenants, it requires property upkeep, preventative maintenance, and in some cases unexpected and expensive home repairs. Some people find this too consuming in terms of time and money, to the point where it stops being profitable or enjoyable for them. Others may just find themselves in situations where the property is not cash-flowing positively, and they need to fund it with a few (or several) hundred dollars per month. In these instances, selling could possibly make more sense. You may also find yourself needing to pull out equity for a different investment opportunity, in which case selling might be the best thing to do, unless of course you can do a cash-out refinance which can be beneficial if the interest rate environment is favorable.
Depending on market conditions such as interest rates, supply and demand, or other factors, you could receive a great offer for your property. If you are presented with an irresistible offer to sell, you might decide to take it, depending on factors such as your income from other sources, potential tax consequences, and what you plan to do with the equity you pull out of your property. We highly recommend consulting with a CPA who is experienced with real estate investments, as they can help you understand the tax implications and burden you would experience.
Lastly, you may simply not want to be a landlord. That’s as fair of a reason as any of the previous ones. Fortunately, while a landlord’s priorities may change with time, people will always need a roof over their heads. As such, the market will always have buyers and renters, which gives you enough room to carefully consider whether you want to rent or sell, depending on what makes the most sense for you and your family.
Listing a Property For Rent And Sale At The Same Time
For some property owners, the answer to “Should I sell my house or rent it out?” is not a matter of choosing either, but rather settling for whatever happens first.
While at first glance listing a property for rent and sale simultaneously may seem like the best approach to get faster results, the truth is that a “why not both” philosophy can create a plethora of problems, and confusion, adding layers of complexities to the process, and almost always end up upsetting buyers and renters.
To help you become aware of these challenges with listing both for sale and rent simultaneously, and not get caught off guard by them, we’ve compiled them in three categories: practical, marketing, and legal issues.
Practical Issues With Listings Both For Rent & Sale Simultaneously
Let’s begin with the practical, on-site consequences of going for both listings (sale and rent) simultaneously. The first of them is potentially crowded and confusing showings.
Picture this: two different prospects, looking to buy and rent respectively, find your property through different online sources (Zillow cannot support both). They proceed to book a tour to see the house on the same date, at the same (or overlapping) times. The Buyer is booking an appointment with their agent, and the renter is scheduling a self-guided tour through your property manager’s system. Neither the property manager nor the Buyer’s agent are aware of the other’s showing.
On the day of the showing, the Buyers arrive and meet with their agent, only to also find another interested party claiming they’re there to tour the house they plan to rent.
This creates an awkward situation for everyone involved since neither expected the other party to be present during their tour. The tension leads them to think something fishy is going on with the property and they decide to opt out of looking into a potential purchase or lease agreement. Alternatively, the Buyer’s agent may just scare the tenant off, causing them to give negative feedback about the property or tour, or possibly even the property management company through a negative Google Review or feedback form.
While this seems like a good problem to have because it shows interest in your property, it’s not the best way to find out if you should sell your house or rent it out. In fact, it could even self-sabotage the sale or rental of your house and defeat the purpose of listing both with the intention of closing a deal as soon as possible and limiting the confusion in the market.
Marketing Implications Of Listing For Rent & Sale Simultaneously
Listing your home both for sale and rent involves following two different goals simultaneously and twice the marketing efforts.
After all, people looking to buy or rent a house belong to different markets, meaning you’ll need to create separate listings, upload them to different sites, and set each of them up so your property ends in the eyes of the right audience.
This is tricky without prior experience and will inevitably dilute the effectiveness of your campaigns compared to handling one specific goal since you’ll have to juggle between the information aimed at different suitors with distinct needs.
More importantly, these efforts can cost twice as much to list on marketplaces to gain exposure and bring no additional benefit, as you can only end up choosing one of the outcomes, whether you’re selling or renting your property.
Since Zillow and other online marketplaces won’t allow a listing to be marketed for sale and for rent simultaneously, you will need to decide which is the one outcome you prefer and invest your efforts into that. Want to know how you can do both? Keep reading to discover the answer!
Legal Ramifications Of Dual Listings
Next time you ask yourself “Should I sell my house or rent it out?”, consider the potential legal pitfalls of listing both at the same time, the confusion this can cause, and the liability you might be exposed to if your listing agent is not also the property manager.
Imagine you have both a prospective tenant and a potential buyer who are really interested in renting and purchasing your property. What would happen if both sign a lease agreement and a sale contract on the same day? Who has the final say? How do you get out of one agreement without the tenant or buyer forcing you to a contract? If your listing agent is not also your property manager, and the right-hand doesn’t know what the left is doing, you might find yourself in this precarious situation.
While this is a most extreme case, it could lead to some litigious situations from either party, forcing you to compensate either of them for breaking a legally binding agreement.
This would tarnish your agent or property manager’s reputation, cause friction in the process of accomplishing either outcome and further delay the process of selling or renting.
Before going for both listings, make sure you have a well-thought answer to the following questions:
If your property manager is not also your listing agent, what is your plan if rental and sale agreements are reached concurrently?
How would you handle litigious prospective tenants or buyers who could potentially cloud your title?
If a sale seems imminent after agreeing to rent, are you willing to compensate the tenant to terminate the lease?
Listing A Property For Rent And Sale Simultaneously: Is It Worth It?
Doing both only makes sense if you don’t have a concrete goal, would be happy with either outcome and you are NOT in a hurry. However, it is a difficult process to navigate by yourself and may lead to unwanted setbacks without prior experience.
If you are on the fence, pondering “Should I sell my house or rent it out?”, our best piece of advice is to reach out to an experienced property manager with a proven track record of handling both listings simultaneously, who can walk you through the process and take care of the heavy lifting for you.
Need Help Renting Or Selling Your Property?
The dynamic nature of the real estate market is tough to navigate alone. Fortunately, you don’t have to.
Keyrenter OKC brings relief and peace of mind to homeowners across the nation by managing their properties and streamlining the listing process so that owning, renting, and selling a house feels like the hands-off, hassle-free passive income venture that you’ve always dreamed of.
Our unique platforms empower our clients to gain a higher level of transparency and a deeper level of understanding when it comes to their real estate investments. Regardless of whether they’re looking to rent, sell, or do both at the same time.
Keyrenter OKC’s team has decades of experience handling a wide variety of market and transaction scenarios and is familiar with the state laws, regulations, and legal frameworks of the housing market. We’ll take the driver’s seat for you to sit back, relax, and enjoy the benefits of being a homeowner, without the hassles.
Visit KeyrenterOklahomaCity.com to find out how we can transform today’s challenges into the foundation for your future success.
Q&A
Q1. Is It Better To Rent Or Sell A Property?
A: Whether it’s better to rent or sell a property depends entirely on your short-term vs long-term goals. If you need a large sum of cash for a future project or investment, it’ll be better for you to sell. If your priority is to grow your monthly cash flow, you’re better off renting your property.
Q2. How To Decide If You Should Rent Or Sell Your House?
A: The first thing you need to do is to weigh your short-term and long-term financial goals against your immediate priorities. Secondly, you need to consider the cost and benefits of being a landlord, potential income from either scenario, current market conditions, and understand what current levels of buyer vs renter demand in your area. Lastly, we strongly advise reaching out to a local property manager, as they have enough experience, tools, and market insight to give you a deeper and broader perspective on the subject. From conducting rental analyses to comprehensive investment analyses, through the acquisition process, and finally, understanding the performance of your investment, we have all the tools and knowledge you need!