When your current home no longer meets your needs, you have a choice to make: rent it out or sell it? Here are some questions you'll need to ponder when deciding which way to go.
- What are your renting rights? Those living in condos or homeowners associations might be subject to community bylaws prohibiting or limiting (to a certain length of time, for example) their ability to rent out their properties. Even if such bylaws don't apply to you, you should check your mortgage documents and municipal regulations to be sure of your rights.
- Can you afford to hold onto your property in addition to buying your next one? Talk to your mortgage lender. If you need your current home's equity to buy your next home (or for other reasons), the obvious answer's no. Ask your real estate salesperson for an estimate of what you'd pocket by selling, so you can weigh that figure against what you'd bring in through rental income after paying for expenses including maintenance and insurance.
- What's the local market doing? What's it likely to do in the future? Again, talk to your real estate sales representative. They can tell you whether properties comparable to yours are declining or increasing in value and what local demand for rental properties like yours is – factors that will be hugely influential in your decision to sell or rent.
- Is being a landlord for you? Discuss all the pros and cons with your real estate salesperson, your lender and your legal counsel