For those of you who think this article is going to be extremely biased . . . you are probably right. All of our articles are biased. However, I have written on the opposite idea of why you WOULDN’T rent your home in a previous article. I think that buys me enough credit here to give you some good reasons you WOULD rent your home.
There are a lot of real reasons that renting your home makes real sense. Some of them are financial, some of them are very emotional. Either way, all of them are legitimate reasons you would rent your home versus selling it.
Let’s take a look at some we’ve seen recently . . .
1. You are moving out of town, but may need to come back. This is something we see often from people who are moving to take a job. We see this when people are moving and they aren’t really sure the job is going to work out and they aren’t ready to “burn the ships” behind them just yet. For whatever reason they are dipping their toe in the water of the other city and want the option of being able to bail and come back.
I have a really good friend of mine who recently moved to California to take his dream position. While he is dead set on making in in Cali, he also wants to make sure he has a backup plan if his startup doesn’t ever . . . well startup. So he decided against selling his home and this gives him the comfort that he can come back to it if he needs to.
The other job related reason people rent their home is when they are planning on being gone for only a certain period of time and fully expect to come back to the house once the 3, 4, 5 year project in another city is completed. If you know you are coming back and LOVE your home, why wouldn’t you keep it and spare the problems of having to find a new one when you time is done?
2. You are moving (or currently live) out of town, but you plan on retiring back in this community. We’ve seen this from Baby Boomers recently. They would like to purchase a home to retire in, in a certain community, and they want to get it at today’s prices. OK people, I hear you that the market goes up and goes down. But mostly it goes up. If you believe it is going to continue to go up for the foreseeable future, wouldn’t this strategy make sense if you plan on retiring in the next few years?
3. You are accumulating rentals as you move out of one and into another. If the last one is a Baby Boomer strategy, this one is a Millennial strategy. Some Millennials are accumulating rentals by living in a home for a few years; and, once they can afford to do so, will move and instead of selling their home, they will put it on the rental market. They do this over and over again and see it as a way to build wealth.
4. You’ve found the house of your dreams, but can’t sell the one you are living in now. All you realist would say that it isn’t financially sound to fall in love with a home. My answer to that? Live a little! If there ever is a time to get emotional about something, I think it is ok for you to be emotional about the next home you want to live in. Am I saying put yourself in a bad position financially to get there? No. What I am saying is that as someone who has purchased hundreds of homes for investment purposes, I’m more than willing to spend more money than I should on a house I love. Why live the majority of your life in a house you hate?
Renting your previous home is an awesome way for you to get into the home of your dreams and is a legitimate strategy for helping you get there.
5. You need to move because _(fill in your own reason)_, but you can’t sell the house you are living in now. Yes, it is blank for a reason. You can fill in your own reason. Some I frequently see are having a baby, getting divorced, retiring and would like to downsize. . . There are a million reasons to sell your home. Each is unique to that individual. The point is, using the home as a rental home will help you solve many issues.
I’ve been renting homes for over 10 years now and I see tons of legitimate reasons a homeowner would prefer to rent over sell. If you’d like one of us to help you walk through your current situation to see if we think renting your home is right for you, please give us a call!