Why More Homeowners Are Considering Renting Instead of Selling

If your house has been on the market without the offers you expected, you may be wondering whether to keep trying to sell or rent it out instead.

For some homeowners, renting can be a sensible option. For others, the cost and responsibility of becoming a landlord may outweigh the potential income.

The right choice depends on your financial goals, your home’s condition, and the demand for rentals in your area. If you own a home in Chicago or the surrounding suburbs, local rental prices and competition can also affect your decision.

Before you change direction, take time to compare both options. Here are three important questions to help you decide whether renting or selling makes more sense for you.

Key takeaways

• Renting your home can create income, but it also brings ongoing costs and responsibilities.
• Your expected rent, property condition, mortgage, and local rental demand all matter.
• Landlords must plan for repairs, vacant periods, insurance, and property management.
• Before turning an unsold home into a rental, review whether changes to your selling strategy could help.

Why Are More Homeowners Considering Renting Instead of Selling?

When a home does not sell as expected, some owners consider renting it until market conditions improve. This can turn a planned sale into an unexpected landlord responsibility.

These owners are often called accidental landlords. They originally planned to sell but decide to rent their property instead.

According to Zillow’s research, 2.3% of homes listed for rent on Zillow had previously been listed for sale. Zillow reported that this was the second-highest share in its nearly six-year record, behind November 2022.

This does not mean renting is the wrong decision. It means homeowners should look beyond the immediate frustration of a home that has not sold.

Before choosing a path, consider the property’s rental potential, the responsibilities involved, and the numbers behind the decision.

1. Would Your House Work Well as a Rental?

Not every home is a good rental investment. The answer depends on the property’s condition, its location, and what renters are willing to pay.

Start by asking yourself these questions:

• Is your home ready for tenants? Repairs, cleaning, safety updates, or other improvements may be needed before you can rent it.
• Is there demand for rentals nearby? Research comparable rental properties and how long they remain available.
• What rent could you realistically charge? Compare similar homes rather than relying on an ideal asking price.
• Can you manage the property from a distance? If you are moving away, you will need a reliable plan for repairs, emergencies, and tenant communication.
• Are there restrictions on renting your property? Check any applicable association rules, mortgage terms, insurance requirements, and local regulations.

Rental demand can vary between neighborhoods, even within the same city. A home that attracts renters in one area may face more competition in another.

For example, if you own a home in Chicago, compare similar properties in your neighborhood. Look at their rental prices, condition, features, and availability before estimating your potential income.

You can also review available rental listings to understand the types of properties being marketed to renters. Remember that advertised rents are asking prices, not a guarantee of what your home will earn.

If your property needs expensive repairs or the expected rent is too low, renting may not be the best financial choice.

2. Are You Ready to Become a Landlord?

Renting a house can look like a simple way to earn monthly income. In practice, being a landlord involves regular work, financial planning, and dealing with unexpected problems.

Consider what could happen after a tenant moves in:

• A plumbing problem or heating system failure needs urgent attention.
• A tenant pays rent late or misses a payment.
• You need to repair damage between tenants.
• The property sits vacant while you continue paying its expenses.
• You need to respond to maintenance requests and handle tenant concerns.

Landlords also have legal responsibilities. These can include maintaining a habitable property, following applicable housing laws, handling security deposits correctly, and complying with lease requirements.

Read Redfin’s guide to selling or renting a home for more information about rental costs and maintenance responsibilities.

If you do not have the time or experience to manage these tasks, you may need a professional property manager. That service can help, but it adds another expense.

Before deciding to rent, think honestly about whether you are comfortable handling these responsibilities or paying someone to manage them.

3. Have You Calculated the Real Costs?

Rental income is not the same as profit. Before deciding to rent your home, estimate how much money you could keep after paying the property’s expenses.

Start by listing the costs you may need to cover:

• Mortgage payments: Your monthly mortgage may continue even when the property has no tenant.
• Property taxes: Include your expected tax payments when calculating the cost of ownership.
• Landlord insurance: Your existing homeowners policy may not provide the right coverage for a rental property.
• Maintenance and repairs: Plan for routine upkeep and unexpected problems with plumbing, appliances, heating, or other systems.
• Property management: If you hire a manager, include the management fee and any additional service charges.
• Vacancy periods: You may have months when no rent comes in, but property expenses continue.
• Tenant advertising and turnover: Finding new tenants and preparing the property between leases may cost money.
• Association fees and utilities: Include applicable HOA or condo fees and any utilities you remain responsible for.

Once you have estimated these expenses, compare them with the rent you realistically expect to receive.

Compare rental income with the option of selling

A simple comparison can help you see the difference between the two choices.

For a more realistic rental estimate, subtract expected expenses and set aside money for repairs and vacancies. Do not assume the entire rent payment will be available as income.

For the selling option, estimate what you could receive after your mortgage payoff, selling costs, and any applicable taxes. Your actual result will depend on your circumstances.

Neither option is automatically better. The goal is to understand what each choice could mean for your finances before committing.

Before You Rent, Review Your Selling Strategy

If your home has not sold, renting is not your only option. It may be worth reviewing what happened during the selling process before making a long-term decision.

Talk with your current agent about the factors that may have affected buyer interest. Consider reviewing:

• Pricing: Is your asking price competitive with similar homes that have recently sold?
• Presentation: Does the property make a strong first impression in photos and during showings?
• Marketing: Is the listing reaching the right buyers through the appropriate channels?
• Buyer feedback: Have showings or comments revealed concerns that you can address?
• Competition: Are other homes offering features or value that buyers may prefer?

Sometimes, a change in pricing, presentation, or marketing can improve a home’s appeal. However, the right approach depends on local market conditions and the reasons your property has not sold.

If you are considering another selling strategy, review the available options with an agent who understands your market. You can also learn more about selling a home with KM Realty Group LLC.

So, Should You Rent or Sell Your House?

Renting may make sense if your property can attract reliable tenants, the expected income covers your costs, and you are prepared for the responsibilities of being a landlord.

Selling may be a better fit if you need access to your equity, do not want ongoing property responsibilities, or find that the rental numbers do not work.

Before making your decision, compare both options using realistic figures. Consider your plans for the next few years, your available cash reserves, and the time you can devote to the property.

If your home has not sold yet, do not assume you must become a landlord. Review the reasons it has not attracted the right offer, compare your financial options, and choose the path that best supports your goals.

Frequently Asked Questions

Is it better to rent or sell a house that has not sold?

It depends on your financial situation, local rental demand, expected expenses, and future plans. Compare the potential net income from renting with the estimated proceeds from selling before deciding.

What costs should I consider before renting out my house?

Consider mortgage payments, property taxes, landlord insurance, maintenance, repairs, management fees, vacancy periods, advertising, and applicable association fees. Your actual costs will depend on the property and its location.

What is an accidental landlord?

An accidental landlord is someone who originally planned to sell a property but decides to rent it instead. This can happen when the home does not sell at the expected price or within the desired timeframe.

Should I change my asking price if my house has not sold?

A price change may help, but first review comparable sales, buyer feedback, property condition, presentation, and marketing. Discuss the evidence with your agent before deciding what to change.

Can I rent out my house while I still have a mortgage?

Possibly, but you should review your mortgage terms, insurance coverage, and any applicable association or local rules before renting the property. Contact your lender and insurance provider if you are unsure about the requirements.

How do I know whether renting will be profitable?

Estimate realistic rental income, then subtract expected operating expenses and account for vacancies and unexpected repairs. Consider seeking advice from a qualified financial or tax professional if you need help evaluating the financial implications.