Should I Sell or Rent My Home?

Should You Sell Your Salt Lake City Home or Keep It as a Rental?

If you're thinking about moving, you may be asking yourself:

“Should I sell my house or rent it out?”

It's a big decision, and there isn't one right answer for everyone. I know, I am also a landlord. 

Maybe you've built up significant equity. Maybe you have a low mortgage rate you'd hate to give up. Maybe you’re moving for work, downsizing, relocating out of Utah, or buying another home.

Keeping your current home as a rental can create another source of income and allow you to continue building equity. But being a landlord also comes with expenses, responsibilities, vacancies, repairs and risks.

The right choice depends on the numbers, your goals and how much you actually want to be a landlord.

Let's look at both options.

Sell or Rent? Start With the Numbers.

Before making a decision, I recommend looking at these six things:

1. What Could Your Home Sell For?

First, determine your home's realistic current market value.

Don't rely entirely on an online home estimate. Your home's condition, location, upgrades, competition and current buyer demand all affect what someone may actually be willing to pay.

2. How Much Do You Owe?

Your mortgage balance is important because it determines how much equity you may have after selling.

For example:

Estimated Home Value: $650,000
Mortgage Balance: $300,000

That's approximately $350,000 in gross equity before selling expenses.

Your actual net proceeds would be lower after the costs associated with selling.

3. What Could You Rent It For?

Research comparable rental properties in your neighborhood. I suggest Rentler or KSL.

Look at homes with similar:

• Bedrooms
• Bathrooms
• Square footage
• Garage
• Lot size
• Condition
• Location
• Amenities

Then determine what renters are realistically paying, not just what you'd like to charge.

4. What Will It Cost to Own as a Rental?

Rent isn't the same thing as profit. You may need to account for:

• Mortgage payment
• Property taxes
• Homeowners insurance
• HOA fees
• Property management
• Maintenance
• Repairs
• Landscaping
• Vacancy
• Utilities you agree to cover
• Turnover costs
• Capital improvements
• Leasing fees

The question isn't:

“Can I rent it for more than my mortgage?”

The better question is:

“What will my actual return be after all of my expenses?”

When Renting Your Home Might Make Sense

Keeping your home as a rental may be worth considering if:

You Have a Favorable Mortgage

If you have a particularly attractive existing mortgage rate, you may be reluctant to give it up.

That doesn't automatically mean you should rent the property, but it's an important part of the financial picture.

The Property Produces Positive Cash Flow

If your expected rent comfortably exceeds your ongoing expenses, keeping the home may create monthly cash flow.

But make sure you've included realistic maintenance, vacancy and management costs.

You Have Significant Long-Term Equity Potential

Real estate can potentially provide long-term appreciation while renters help cover some or all of your ownership expenses. There are no guarantees, of course, and property values can rise or fall.

You Want to Build a Rental Portfolio

If becoming a real estate investor is part of your long-term plan, keeping your current home could potentially become your first investment property.

You Don't Need the Equity Right Now

If you don't need the cash from selling, you may prefer to keep the property and continue owning the asset.

When Selling Your Home Might Make More Sense

Selling may be the better option if:

You Need the Equity for Your Next Home

If you need the money tied up in your current home to purchase your next property, selling may make more financial sense.

The Rental Numbers Don't Work

If rent barely covers, or doesn't cover, your mortgage and other expenses, you're essentially subsidizing the property every month. That may be intentional if you're focused on long-term appreciation, but you should know what you're signing up for.

You Don't Want to Be a Landlord

This is a big one. 

Being a landlord isn't completely passive. 

• Tenants call.
• Furnaces break.
• Water heaters quit.
• Toilets overflow.
• Vacancies happen.
• If the idea of dealing with those things makes you cringe, that's worth considering.
• You can hire a property manager, but that becomes another expense.

You Have a Better Opportunity for Your Equity

Selling your home could give you access to a substantial amount of cash.

You may want to use that money for:

• Your next home
• Another investment property
• Retirement
• Paying down debt
• A business
• Education
• Other investments

Sometimes the best investment decision is not necessarily keeping the property.

Don't Forget About Taxes

Taxes can be an important part of the sell vs. rent decision.

If you've lived in your home as your primary residence, you may potentially qualify for the federal home-sale capital gains exclusion if you meet the applicable requirements.

The rules can become more complicated when a property is converted from a primary residence to a rental. There may also be depreciation and other tax considerations associated with renting a property. 

Talk with a qualified tax professional about your individual situation before making a decision based on tax consequences.

I can help you understand the real estate side of the decision, but your CPA or tax advisor should advise you about your specific tax situation.

What If I'm Moving Out of Utah?

This is a common question for homeowners who are relocating. You don't necessarily have to sell your Salt Lake City home just because you're moving away.

You could potentially:

Sell it before you move.

Rent it and hire a property manager.

Keep it temporarily and decide later.

If you're moving out of state, consider whether you really want to manage a Utah rental from another state.

A property manager can handle many day-to-day responsibilities, but you'll need to factor that cost into your rental analysis.

What If I Have a Low Mortgage Rate?

This is one of the biggest reasons homeowners consider renting instead of selling.

You may be thinking:

“I don't want to give up my 3% mortgage.”

Totally understandable.

But don't let the mortgage rate make the entire decision for you. A low interest rate is valuable, but so is the equity you may have built in the property.

The real question is:

What is the best use of this property and the equity tied up in it?

Run the numbers.

A Simple Sell vs. Rent Comparison

Let's say your Salt Lake County home could sell for $650,000.

You owe $300,000 on the mortgage.

You could potentially have around $350,000 in gross equity before selling expenses.

Now let's say the property could rent for $3,000 per month.

That sounds good.

But now subtract:

• Mortgage
• Taxes
• Insurance
• HOA
• Property management
• Maintenance
• Vacancy
• Repairs

Your actual monthly cash flow could look very different. That's why I recommend doing a real rental analysis rather than simply comparing rent to your mortgage payment.

The Sell vs. Rent Questions I Would Ask You

Before recommending one option over the other, I'd want to know:

About Your Home

• What is it worth today?
• What do similar homes sell for?
• What could it realistically rent for?
• How much do you owe?
• What is your current interest rate?
• Do you have an HOA?
• What repairs or updates are needed?

About Your Finances

• How much equity do you have?
• Do you need the equity for another purchase?
• What are your monthly expenses?
• What return are you expecting?

About Your Life

• Are you moving permanently?
• Are you staying in Utah?
• How long would you keep the property?
• Are you comfortable being a landlord?
• Would you hire a property manager?

About Your Goals

• Do you want monthly cash flow?
• Do you want long-term appreciation?
• Are you trying to build a rental portfolio?
• Do you need cash now?
• Are you looking for simplicity?

Your answers can change the recommendation completely.

Sell vs. Rent: Quick Comparison

What About Renting It for a Few Years and Selling Later?

That's another option.

You don't necessarily have to think of this as:

Sell OR rent forever.

You could potentially rent the property for a period of time and sell later. But if you're considering that strategy, understand how the timeline could affect your finances, taxes, maintenance and eventual sale.

This is one of those situations where running the numbers before making the decision is really important.

Should I Sell or Rent My House in Salt Lake City?

If you're asking this question, you probably don't need someone telling you:

“You should definitely sell!”

or

“You should definitely keep it as a rental!”

You need someone to help you look at the numbers.

That's how I approach it.

I'll help you compare:

What you could potentially walk away with by selling

versus

What the property could potentially produce as a rental.

Then you can make the decision that makes the most sense for you.

Thinking About Renting Your Home?

Before you become a landlord, let's run the numbers.

I'll help you look at your home's estimated value, current market conditions, potential rental value and what selling might look like.

And if renting doesn't make financial sense? 

I'll tell you that, too. I can also tell you personal stories about my rentals. 

No pressure to list.

No pressure to become a landlord.

Just a conversation about your options.

Nancy Bergman

Your Salt Lake Area Neighborhood Realtor

Salt Lake Home Pros | Homes International

📞 858-617-9449
📧 nancybergmanrealtor@gmail.com
🌐 www.saltlakehomepros.com

Serving Salt Lake City, Salt Lake County, West Jordan, South Jordan, Sandy, Draper, Herriman, Murray, Riverton, Taylorsville, Millcreek and surrounding Utah communities.

Not sure whether to sell or rent? Let's figure it out together.

Frequently Asked Questions

Is it better to sell my house or rent it out?

It depends on your home's value, mortgage, potential rental income, expenses, equity, financial goals and how comfortable you are with being a landlord. Comparing both scenarios can help you make an informed decision.

Should I rent my house or sell it before buying another home?

If you need the equity from your current home to purchase your next property, selling may be the better option. If you don't need the equity and the property produces strong rental numbers, keeping it may be worth considering.

Is it worth keeping my house as a rental?

It can be, particularly if the property generates positive cash flow and fits your long-term investment goals. However, you should account for maintenance, vacancy, management, taxes, insurance, HOA fees and other expenses.

Should I rent my house if I have a low mortgage rate?

A low mortgage rate can be one reason to consider keeping the property, but it shouldn't be the only factor. Compare the property's potential rental return with the amount of equity you could access by selling.

How do I calculate whether my house is worth renting?

Start with realistic market rent, then subtract your mortgage, taxes, insurance, HOA, management, maintenance, vacancy and other expenses. This gives you a better estimate of potential cash flow.

What expenses should I consider before renting my house?

Consider mortgage payments, property taxes, insurance, HOA fees, repairs, maintenance, vacancy, property management, leasing costs, utilities and future capital improvements.

Should I hire a property manager?

If you don't want to handle tenant communication, maintenance calls, rent collection, leasing and other responsibilities yourself, a property manager may be worth considering. Their fee should be included in your rental analysis.

What happens to my taxes if I rent my home?

Converting a primary residence into a rental can create tax considerations involving rental income, expenses, depreciation and the eventual sale of the property. Speak with a qualified tax professional about your individual situation.

Can I sell my house after renting it?

Yes. A rental property can generally be sold later. However, the length of time you've rented the property and your individual tax circumstances can affect the financial implications of the sale.

How do I know what my home is worth?

A local comparative market analysis can give you a more useful estimate than relying solely on an online home-value estimate. Your home's condition, location, upgrades and current competition all matter.

Related Salt Lake City Home Selling Resources

Thinking about selling? Learn [How Long Does It Take to Sell a House in Salt Lake City?]

Not sure whether to renovate? Read [Should I Update My Home Before Selling or Sell As-Is?]

Want to understand your potential proceeds? Use the [Salt Lake City Closing Cost Calculator]

Considering selling without an agent? Read [FSBO vs. Hiring a Realtor]

Getting ready to list? Check out [Tips for Preparing Your Home to Sell]