(MoneyHippo.com) – Home prices in June 2022 were up an average of 11.2% from 2021, giving many homeowners a good chunk of equity in their property. With the market entering an uncertain future, some may question whether they should sell their abode at a premium, invest the dollars, and rent a house instead. While that might be a tempting prospect, you should not only consider your individual situation before making a move but compare renting to owning as well.
Renting a residence leaves you at the homeowner’s mercy regarding your monthly payment amount. However, as a leasee, you aren’t responsible for maintenance costs to the property, which could save you a lot of money and headaches. On the other hand, as you pay your rent, you are no longer gaining equity in real estate. As a renter, you need to do a cost/benefit analysis to determine if you can invest the money you gained by selling your home in an asset that historically outpaces the housing market over the long term.
Keeping your property instead of selling it in a hot market leaves you vulnerable to losing equity if real estate begins to decline. Additionally, keeping your cash tied up in real estate means you don’t have it on hand for things like investing in the stock market, a rental property of your own, or retirement. Selling might make sense if you think the market will drop, giving you more control over your financial wealth trajectory.
As always, think about your own situation and goals before deciding whether to sell and rent or keep your house. Talk to a professional if you need help weighing your options.
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