Don’t Let These Two Concerns Hold You Back from Selling Your House
If you’re debating whether or not you want to sell right now, it might be because you’ve got some unanswered questions, like if moving really makes sense in today’s market. Maybe you’re wondering if it’s even a good idea to move right now. Or you’re stressed because you think you won't find a house you like.To put your mind at ease, here’s how to tackle these two concerns head-on.Is It Even a Good Idea To Move Right Now?If you own a home already, you may have been holding off because you don’t want to sell and take on a higher mortgage rate on your next house. But your move may be a lot more feasible than you think, and that’s because of your equity.Equity is the current market value of your home minus what you still owe on your loan. And thanks to the rapid appreciation we saw over the past few years, your equity has gotten a big boost. Just how much are we talking about? See for yourself. As Dr. Selma Hepp, Chief Economist at CoreLogic, explains:“Persistent home price growth has continued to fuel home equity gains for existing homeowners who now average about $315,000 in equity and almost $129,000 more than at the onset of the pandemic.”Here’s why this can be such a game-changer when you sell. You can use that equity to put down a larger amount on your next home, which means financing less at today’s mortgage rate. And in some cases, you may even be able to buy your next home in cash, avoiding mortgage rates altogether.The bottom line? Your equity could be the key to making your next move possible.Will I Be Able To Find a Home I Like?If this is on your mind, it’s probably because you remember just how low the supply of homes for sale got over the past few years. It felt nearly impossible to find a home to buy because there were so few available.But finding a home in today’s market isn’t as challenging. That’s because the number of homes for sale is growing, giving you more options to choose from. Data from Realtor.com shows just how much inventory has increased – it's up almost 30% year-over-year (see graph below):And even though inventory is still below pre-pandemic levels, this is the highest it’s been in quite a while. That means you have more options for your move, but your house should still stand out to buyers at the same time. That’s a sweet spot for you.It’s important to note, though, that this balance varies by local market. Some places may have more homes for sale than others, so working with a local real estate agent is the best way to see what inventory trends look like in your area. Bottom LineIf you’re thinking about selling, hopefully these concerns haven’t kept you up at night. With this information, you should realize you don’t have to let the what-if’s delay your move anymore.Connect with a local agent so you have the data and the local perspective you need to move forward.
The Big Difference Between Renter and Homeowner Net Worth
Some HighlightsIf you’re torn between renting or buying, don’t forget to factor in the wealth-building power of homeownership.Unlike renters, homeowners gain equity as they pay their mortgage and as home values rise. That’s why, on average, a homeowner’s net worth is nearly 40x higher than a renter’s. Connect with an agent if you want to learn more about the financial benefits of homeownership or the programs that can help make buying possible.
Should You Sell Your House or Rent It Out?
When you’re ready to move, figuring out what to do with your house is a big decision. And today, more homeowners are considering renting their home instead of selling it. Recent data from Zillow shows about two-thirds (66%) of sellers thought about renting their home before listing, with nearly a third (28%) taking that possibility seriously. Compared to 2021, when fewer than half (47%) of homeowners considered renting before selling, it’s clear this trend is on the rise.So, should you sell your house and use the money toward your next home or keep it as a rental to build long-term wealth? Let’s walk through some important questions to help you determine the right path for your financial and lifestyle goals. Is Your House a Good Fit for Renting?Before you decide what to do, it's important to think about if it would make a good rental in the first place. For instance, if you’re moving far away, managing ongoing maintenance could become a major hassle. Other factors to consider are if your neighborhood is ideal for rentals and if your house needs significant repairs before it’s ready for tenants.If any of these situations sound familiar, selling might be a more practical choice.Are You Ready for the Realities of Being a Landlord?Managing a rental property involves more than collecting monthly rent. It’s a commitment that can be time-consuming and challenging.For example, you may get maintenance calls at all hours of the day or discover damage that needs to be repaired before a new tenant moves in. There’s also the risk of tenants missing payments or breaking their lease, which can add unexpected stress and financial strain. As Redfin notes: “Landlords have to fix things like broken pipes, defunct HVAC systems, and structural damage, among other essential repairs. If you don't have a few thousand dollars on hand to take care of these repairs, you could end up in a bind.”Do You Understand the Costs?If you’re considering renting primarily for passive income, remember, there are additional costs you should anticipate. As an article from Bankrate explains:Mortgage and Property Taxes: You still need to pay these expenses, even if the rent doesn’t cover all of it.Insurance: Landlord insurance typically costs about 25% more than regular home insurance, and it’s necessary to cover damages and injuries.Maintenance and Repairs: Plan to spend at least 1% of the home’s value annually, more if the house is older.Finding a Tenant: This involves advertising costs and potentially paying for background checks.Vacancies: If the property sits empty between tenants, you’ll lose rental income and have to cover the cost of the mortgage until you find a new tenant.Management and HOA Fees: A property manager can ease the burden, but typically charges about 10% of the rent. HOA fees are an additional cost too, if applicable.Bottom LineTo sum it all up, selling or renting out your home is a personal decision. Make sure to weigh the pros and cons carefully and consult with professionals so you feel supported and informed as you make your decision. A real estate agent can be a great person to go to for advice.
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