When you’re ready to move within or out of Chicago, deciding what to do with your home can be a significant decision. Should you sell your home and use the money for your next adventure, or keep it as a rental to build long-term wealth in the Chicago real estate market?
Many homeowners face this question, and the answer isn’t always straightforward.
Whether you’re curious about the potential income from renting or worried about the responsibilities of being a landlord, there’s much to consider.
Let’s walk through some key questions to help you make the best decision for your situation.
Is Your House a Good Fit for Renting?
Even if you’re interested in becoming a landlord, your current house might not be ideal for renting. Maybe you’re moving far away, so keeping up with the ongoing maintenance would be a hassle; the neighborhood isn’t great for rentals, or the house needs significant repairs before you can rent it out.
If any of this might apply, selling might be your best option.
Are You Ready for the Realities of Being a Landlord?
Managing a rental property isn’t just about collecting rent checks. It’s a time-consuming and sometimes challenging job.
For example, you may receive calls from tenants at all hours of the day with maintenance requests.
You may also find that a tenant has caused damage that needs to be repaired before the next lease starts.
You may even encounter individuals who fall behind on payments or break their lease early.
Investopedia highlights:
“It isn’t difficult to find horror stories of landlords troubled with more headaches than profits. Before deciding to rent, consider talking to other landlords and doing a detailed cost analysis. You might find that selling your home is a better financial decision and less stressful.”
Do You Have a Good Understanding of What It’ll Cost?
If you’re thinking about renting out your home primarily to generate extra income, remember that there are additional costs you’ll want to plan for.
Curious about rental trends? See why Chicago property management forecasts rents to rise.
It’s also worth considering the long-term wealth you could miss out on by not owning your home. Renters Missed Out on $51,500 This Past Year — a reminder of the equity and financial benefits homeownership can bring compared to renting.
As an article from Bankrate explains:
- Mortgage & Property Taxes: You must pay these expenses, even if the rent doesn’t cover them all.
- Insurance: Landlord insurance costs about 25% more than regular home insurance, and coverage for damages and injuries is necessary.
- Maintenance and Repairs: Plan to spend at least 1% of the home’s value annually on maintenance and repairs, more if the home is older.
- Finding a Tenant involves advertising costs and paying for background checks.
- Vacancies: If the property sits empty between tenants, you’ll lose rental income.
- Management and HOA Fees: A property manager can ease the burden, but typically charges about 10% of the rent. If applicable, HOA fees are an additional cost.
Ready to Decide Your Next Move?
To sum it all up, selling or renting out your home is a personal decision that depends on your circumstances. Whatever you decide, evaluating your options will help you make the best choice for your future.
For more insights, see our guide on Is it Better to Rent or Buy a Home in Chicago?
Be sure to weigh the pros and cons carefully and consult with professionals to feel supported and informed as you make your decision. That’s what we’re here for. If you’re deciding whether to sell or rent your home in Chicago, consult with local real estate professionals for personalized advice and support.
Read more about Why Homeownership Is Worth It in Chicago for helpful tips.
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