Often, we get asked by clients to help them weigh the pros and cons of selling versus renting out their home. Usually, the desire to do so from a homeowner comes with a short and long-term plan – it allows an owner the time to determine what they ultimately want to do with a property if they have a need to move out of it.
Michael Emery, senior partner with New Eastside’s Urban Real Estate, says the reasons are typically situational. “When a current occupant/owner contemplates renting out vs. selling, it is often due to life circumstances such as work relocation, expansion of family, or need to find something more affordable. Financial factors on opposite ends of the spectrum also impact this decision.” He adds, “They can include everything from wanting to create an income stream because there is equity in the home – to clients on the other end who cannot afford to sell their home and are looking for a way to help cover expenses (i.e. mortgage, association dues, taxes, etc.) while still maintaining the asset.”
A few things to consider:
- Renters will only pay what the market will allow. We sit down with our clients and help them assess which makes most sense.
- If you currently are living in the home, there is also the consideration of what you would do with your belongings. Renting out “furnished” today is less a trend. Those renters are more short-term, and really want a pristine hotel-style experience if they are going to pay for it. Therefore, your items would generally have to move with you. Otherwise, plan on additional moving and storage fees.
- Maintenance - Things will break, and you need to have a plan to respond expeditiously, and be prepared to make repairs or replacements, as needed.
- Do I have reserves to cover my expenses if a renter doesn’t? While background and financial checks are run on prospective renters by brokers and sometimes the homeowner association, a hard time can hit anyone, and ultimately, you are on the hook and be prepared for the worse.
On the sales side, we continue to see an increase in Chicago, especially in the condo market. According to the Illinois Realtors in May, the median sales price for the city increased by 4.5%, to $345,000. If a home is priced compellingly, and presents well, it will sell.
There are many sides to making a sound decision. Urban Real Estate’s brokers are ready to walk you through the process. Contact us online, or call us at (312) 528-9200.