Should I Sell or Rent My House When I Relocate for Retirement?
Your home as you have used it during your working years, is just that, a home. You have to consider it as a home first, investment second. If you are considering renting out your home, that order reverses. I often speak with clients who argue that they should keep the home because the rent is sufficient to cover the mortgage cost, or that, because there is no mortgage, this is good “passive income.” These are not good ways to evaluate the quality of the investment. Below are a few rules of thumb:
The 1% rule. You should be able to get 1% of the current purchase price of a home in monthly rent. But what if there is no purchase price? You already own the home. I believe that if you are approaching this objectively, you have to ask yourself: Would you buy this home for the current value, as an investment?