Sell Your House or Rent It?

Is it smarter to become a landlord than pay a big, fat capital gains tax? Here are the pros and cons of renting and selling your house.
Exterior of Black & White Home With Swing in Tree

Timeless Cape Cod Exterior

A circular drive leads to the entrance of the East Hampton home, complete with a picturesque tree swing in the front yard. Decorative black shutters and crisp white siding is a timeless combination.

By: Tammy Stoner

Related To:

Before we spin the wheel of house selling, answer this one question: Have you lived in the house you intend to sell at least two of the past five years? If not, you might incur early mortgage payoff penalties and capital gains tax --- two very hefty bills that may make it financially unwise to sell your home. There are ways to avoid capital gains tax --- job change, divorce, death of a spouse, etc., so check with your accountant if you think you might be the exception to this firm rule.

If you have not lived in your home for two of the last five years, or you have the capital to finance another move without selling your home, or if the market is slow in your area, you might want to consider renting. When budgeting for a renter, be sure to include the following costs:

  • Mortgage payment
  • Property tax
  • Homeowner insurance
  • Homeowner association dues (if applicable)
  • Property management company (if applicable)
  • House maintenance

Also, check to be sure your property insurance premiums won’t change if you convert your residence into a rental property. Above all, prepare yourself mentally: Realize this house is no longer your home but your rental property.

Next Up

5 Types of Neighbors and How to Handle Them

You may love your house, but getting stuck with bad neighbors may have you thinking about putting up a for-sale sign. Here are some tips on dealing with rude, sloppy or nosy neighbors, and even those mean ones with spite houses.

To Sell or Not to Sell

It may seem like a good idea to sell your house, but often renting is a more lucrative option. Read these tips before deciding to sell and choosing an agent.

Adapt Your Home to Its Selling Season

Play up your home's amenities for the season in which you choose to sell.

Real Estate Survival Guide: Seller's Checklist

Refer to this 10-step checklist to get you through the home-selling process.

Using Technology to Sell Your Home

Some sellers are giving away cars and vacations to entice buyers. Here are more affordable technological tactics to modernize your home.

Top 10 Unique Home Selling Tactics

In today’s market, frustrated home sellers are resorting to some unusual methods to get their homes noticed. HGTV gives you some ideas to help sell your home.

Renter or Seller: Timing Your Home Purchase

With a plan in place, suddenly buying a home feels a lot less stressful. Here are tips to ease the process.

Don't Try to Make the Hard Sell

Leaving your home during showings is the best way to help it sell.

Buying and Selling Homes With the Market

Learn how to be a savvy seller in both buyer's and seller's markets.

4 Updates Every Home Seller Must Do

Which remodeling projects give you the most bang for your buck?

Go Shopping

Get product recommendations from HGTV editors, plus can’t-miss sales and deals.

On TV

Follow Us Everywhere

Join the party! Don't miss HGTV in your favorite social media feeds.