Selling vs. Renting: Pros and Cons | Redy

Zak BrethertonApril 3, 2023

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Selling vs. Renting: Making a Decision as a Homeowner

Should I sell or rent my house? As a homeowner, deciding whether to sell or rent your property is one of your biggest decisions when you're ready to move on. It's a complicated choice and comes with many considerations and challenges. In this blog post, we'll explore the factors you should consider when deciding between selling vs. renting your property.

Tax Considerations for Selling vs. Renting


When selling your house, you have to consider capital gains taxes. The Internal Revenue Service (IRS) allows for a capital gains exclusion of up to $250,000 for singles and $500,000 for married couples filing jointly. This only applies if you have owned and lived in the home as your primary residence for at least two of the previous five years. Tax breaks discourage homeowners from renting out their property because they may not qualify for the exclusion if they decide to sell later. Consider selling immediately instead of renting if you'll profit significantly from the sale. Remember: if you rent out your home and decide to move back in later, you must live there for another two years to enjoy the capital gains tax break when you sell.


There are various tax perks associated with renting out your house and becoming a landlord. You can deduct many expenses related to your rental property, which helps to reduce the tax on your rental income. Deductible property expenses include mortgage interest, property taxes, insurance premiums, repairs, maintenance, and utilities. Depreciation is also allowed if you rent out your home. Residential buildings have a 27.5-year recovery period, so you can deduct about 3.5% of the property's value each financial year. Keep in mind, though, that landlords must pay for all improvement and maintenance costs on a rental property upfront. This can discourage some people from renting since they must pay overhead costs immediately and wait for their annual tax deductibles later.

Costs of Selling vs. Renting

The other vital factor to consider is the cost of selling vs. renting. If you're selling your property, you must account for real estate agent fees, closing costs, and any necessary repairs or upgrades to make your property more attractive to potential buyers. These costs can add up quickly and eat into your profit margin.

However, selling your current house can help you get the funds you need to buy a new place. Owning multiple homes can be very expensive and requires significant capital to maintain and repair them.

unlock the hidden value of your home

Is a Landlord the Right Move for You?

Being a landlord can be stressful, especially if you need to familiarize yourself with the process. Think about whether you could afford to pay for repairs, taxes, and property maintenance as a landlord. There may also be times when the property is vacant, and you'll have to pay the mortgage fees out of pocket without supplemental rental income. Additionally, changes to the real estate market, such as fluctuating rental rates or property values, can impact a rental property's financial success.

You also need to consider the possibility of evicting tenants who refuse to pay rent. Some tenants are defiant, and you must force them off the property. Other tenants leave the property without clearing their rent, leading to losses. Charging tenants a security deposit before they move in can help avoid losses by covering any property damage.

Some landlords hire external companies to help manage the property, such as coordinating maintenance and repairs. Most of these companies charge a percentage of your rental income. Before hiring a company to manage your rental property, research their fees and services and have your lawyer look at the contract. Make sure you understand the terms and conditions before signing the contract. 

If You Decide to Sell…

Should I sell my house or rent it out? If you decide to sell your house, first understand that it requires expertise and research. Hiring a real estate agent to market your home, guide you through the process, analyze your offers, and close the best deal. They will also help you understand any required legal documents before signing them.

Redy can help you find a reliable real estate agent to sell your home. We connect you with motivated local agents who want to represent your property sale and negotiate on your behalf. Agents on our platform are licensed and certified professionals with the knowledge and skills needed to sell your house. 

Create your free Redy account today to find the best real estate agent for your home sale. All you need to do is enter your address, confirm your property details, and relax while real estate agents submit proposals to earn your business! You can then review your proposals and choose your agent based on their cash bonus offered, experience in the field, commission rate, and more. 

Bottom Line

Deciding whether to rent or sell a house can be overwhelming. You have to consider all the factors involved on both sides before making a decision. If you decide to sell your home, signing with a professional real estate agent can help you get the best deal while saving time and money. Find your perfect local agent today with Redy!

To learn more about selling your home, visit our Home Seller Resources >

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