Blog Post

Should I Rent Or Sell My Home?

Mar 13, 2024

Homeownership—on the surface—is about having a comfortable place to lay your head. A living space of your own is your place of refuge, your castle, your safe haven.


Yet, you don’t need to own a home to have a living space. You can always rent, for instance.


After all, the upfront costs of renting are much cheaper. No matter where life takes you, you won’t need a mortgage and have optimal freedom of movement.


So—why own a home instead of renting a space? 


As we already suggested, there’s that innate desire to own property—to have something entirely ours and nobody else's.


The benefits of owning a home go deeper than that, though, and they concern the almighty dollar.


Specifically, homeownership is a long-term strategy for
accumulating lasting wealth. 


A home (at least your primary living property) can undoubtedly be your place to rest your head. It also can be a long-term investment yielding substantial profits you can pass down generationally.


Differing methods exist to maximize the wealth derived from homeownership. 


You can let your home’s value appreciate over the years and sell when the time is right, generating substantial returns. Renting out space in your primary residence is another option, offering consistent, passable income (and you can still sell, eventually). Or you can purchase a property specifically to rent out to tenants, another highly profitable venture when done right. 


Read on as we explore the above options for maximizing wealth through homeownership.


To Rent Or To Sell: That Is The Question.

More often than not—remaining mortgages notwithstanding—you’ll turn a profit when you sell your home. It seems to be a universal truth at this point. Houses tend to appreciate in value.


Say you’ve owned your property for over a decade. When you bought the home, you’d have paid around $175,000 (
the median US price at the time of purchase). Now, the median US home price is nearly $420,000.


In getting more local with our analysis, Philly median home prices were
$103,000 in 2010 and are currently $258,000


Undoubtedly, home prices can dip year over year. However, substantial increases will come over the long haul. In furthering our point, the median home value in the 1990s throughout the US
wasn’t even $80,000. Imagine selling that same home for $420,000 (if you’ve owned it since the ‘90s). That’s a 525% ROI.


Holding On And Cashing Out.

The longer you hold onto your property—provided you can afford it—the more its value will increase.


So, why would you be in any rush to sell?


Don’t get us wrong—everybody’s situation differs. Varying circumstances could dictate your need to sell.


However, all things being equal, why not hold onto something that promises to appreciate in value?


A rental property, in particular, offers even more reasons to hold on. Not only will you make a substantial sum of money when you eventually sell (because you let your property appreciate), but you can count on passive income to further bolster your wealth until it’s time to sell. It’s the gift that keeps on giving.


Rental Properties And Profits: A Deeper Dive.

The current median rental price in Philadelphia is $1,650, and renting a home in Philadelphia costs an average of $1,800. 


So, let’s say you’re renting out a house. That’s an additional $21,600 in income you’re earning annually. If you’re saddled with a mortgage, that extra income can help make up the difference faster and more efficiently.


Once your mortgage is paid, the potential for significant profits can’t be ignored. That’s an extra $21,600 yearly (if rentals stay around the same as they are) without mortgage payments to worry about. 


Yes, property taxes and other overhead costs will be factors. Still, your earnings will more than outperform those expenses.


Renting Out Space In Your Primary Residence.

Taking on the financial risk of purchasing a separate rental property isn’t feasible for everyone. 


Furthermore, homeowners often experience hardships. They could lose their jobs or find that their variable mortgage rate has skyrocketed to the point of being unaffordable.


Selling might seem like the only option in the above instances. Seeing the forest through the trees is nigh impossible when you’re weighed down by financial burdens.


A solution that’s changed the game for many homeowners is transforming a portion of their living space into a rental unit. The extra five figures of annual income help cover the soaring living costs plaguing the US. It’s also additional money to cover your mortgage.


Remember, too, mortgages aren’t supposed to be forever. Once you’ve paid yours off, you can still rent and benefit from the passive income offered by your tenant(s).


Only some homes are ideal candidates for renting, and only some homeowners are cut out to be landlords. Still, renting is always an option and is part of the reason homeownership—even in challenging circumstances and with expensive mortgages—can be your ticket to long-term wealth.


Sometimes, You Need To Sell.

It would be foolish and irresponsible for us to treat selling your home—whether a primary residence or a strictly rental property—like a wrong decision. Everybody has different circumstances; holding onto your property isn’t always the wisest choice.


Regarding primary residence owners, you might have the itch to move elsewhere. Other factors like job opportunities might pull you to a new city or state.


Or you might simply want to enrich yourself and live in a different community with its own unique culture.


Alternatively, to steal a phrase from the Godfather, you might receive an offer for your home you plainly can’t refuse—in which case, sell all the way. 


Selling at the right time also applies to rental properties. Someone in your line of work might be willing to hand over a check with enough zeroes to make your head spin, and cashing out could make more sense than continuing to rely on tenants for consistent income.


Renting isn’t a one-size-fits-all solution, and we’re not in the business of encouraging risky decisions that leave you in a precarious place, either financially or emotionally.


Is Renting Your Home A “License To Print Money?”

Owning a rental property or renting out space in your primary residence is often highly lucrative, but that doesn’t guarantee automatic profits.


Your ability to adhere to best practices (including vetting properties and tenants, marketing and pricing strategies, and property upkeep) will dictate your financial success.


While rental income is technically passive, it requires forethought and planning and will not magically boost your bottom line. 


How Can You Maximize The Value Of Your Rental Property?

Effective management, reliable tenant vetting, marketing expertise, and sound business strategies are all ways to ensure you’re getting the most from your rental property.


Developing expertise in the above areas is a significant challenge for many aspiring landlords. These nuanced facets require research, experience, and dedication to fully comprehend and use to your advantage.


For the above reasons, many rental unit owners hire property managers.


Companies like ours—GM Holdings—handle all the nitty-gritty details of property management at a cost-efficient price while you reap the returns. Our industry expertise and our firm grasp of the local landscape keep tenants happy and rental units profitable. 


Contact us today
to discuss a partnership.

Share this post

Philadelphia skyline on a sunny day
27 Mar, 2024
Philadelphia stands alone among big cities, offering renters a heady mix of cultural vibrancy and cost-efficiency. This distinctive trait is a magnet for those wishing to thrive in central hubs while keeping a tight rein on expenses. However, affordability is relative. While Philadelphia is easier on the budget than somewhere like New York, that doesn’t mean tenants are being offered free rent in the City of Brotherly Love. Depending on your financial circumstances, your job, and the part of the city in which you wish to live, things can inevitably get pricey. Let's delve into the numbers. A Philadelphia apartment costs between $1,277 and $1,887. The monthly living cost in the city—rent excluded— hovers around $1,244 for a single person, increasing to $4,459 for a family of four. While these figures appear daunting, don’t allow them to deter your search for an ideal living space. Regardless of your salary or budget, our budget-friendly tips and tricks will help you navigate the sometimes turbulent financial waters of apartment hunting in Philly. Build Your Battle Plan: Map Out Your Expenses Nobody enters an apartment hunt aiming to overspend. Everyone is looking for the ideal balance of comfortable living and affordability. Achieving this happy medium is much easier in theory than in practice. Society, as we know it, does everything in its power to get you to spend while you're trying to save. Apartment hunting is no different. Landlords are looking to turn a profit, after all. Sticking to a budget while living in a space that offers comfort and meets your standards necessitates an ongoing sense of push-pull. Thus, you must draw up your battle plan. That means mapping out apartment and living expenses, including rent, gas, utilities, credit card bills, insurance, groceries, parking, move-in costs, etc., before you start hunting. Keep these suggestions in mind as you plan your budget: Look for rental costs below 30% of your monthly income to afford other living costs. Investigate the average cost of rent across Philly neighborhoods (beyond our generalized numbers in the introduction) to see what areas best fit your price range. Be realistic. Yes, economic choices are a must, but everybody has their limits. Create an expense and budget plan you’ll actually follow, not one that’s too constrictive. Look For Ways To Cut Costs While not always the case, an apartment with less space will cost less than roomier units in the same building (or neighborhood). The above statement might seem obvious, but consider what it can mean to you as you adhere to a strict(ish) budget on your apartment hunt. First and foremost, how much space do you need? If you live alone or even with one roommate, you might be surprised to learn how little space you require to live comfortably. In this instance, living in a more extravagant neighborhood in a smaller unit might be feasible. Conversely, you can move to a slightly bigger place in a more affordable neighborhood. Or, you can live in a smaller place in a more cost-friendly neighborhood to rack up the savings. Consider, too, how apartment units on the middle floors also cost less because people pay more to live on the top and bottom levels. We’ve already seen the broad range of monthly rental costs, meaning prices can vary significantly. Spend adequate time on local apartment rental websites and platforms to get a genuine feel for the rates in your preferred neighborhoods. Also—ask friends who live in the city what they’re paying. Be tactful with your questions, but don’t be afraid to investigate. This concerns your savings and financial future; your close pals (and fellow renters) will gladly offer insights and data. Negotiate A Discount While some property managers and landlords might not be willing to budge on price, others could have some wiggle room. That said, the worst anybody ever said when asked about a discount was ‘no.’ Even if you’re unsure about the other party’s openness to negotiations, it’s a subject worth broaching. An ideal time to capitalize on a negotiation opportunity is if the unit has some issues or if the building lacks your desired amenities. Depending on the circumstances of your prospective apartment, the following tips might also help you procure discounted rates: Offer to sign an extended lease. Say you’ll prepay months in advance. Suggest a 60 or 90-day termination notice stipulation instead of 30 days. Make it clear you won’t smoke inside the unit. Come to an agreement regarding referrals (e.g., monthly reductions when you refer renters). This works in low-occupancy buildings in need of tenants. Inform your prospective property manager you won’t have any cats or dogs (even if they’re allowed in the building). Another consideration is whether you’d want to live somewhere so willing to offer a discount. Be sure you’re not actually the one getting duped. A unit can need fixing up while still being liveable, but that doesn’t mean you should accept living in a borderline uninhabitable environment to save a few bucks. Get Your Finger On The Pulse: Discover Up And Coming Neighborhoods The discount strategies discussed in the previous section raised a question everyone must ask themselves when budgeting for anything: How much quality is worth sacrificing in the name of affordability? It can be a frustrating battle to fight. Often, saving money on an apartment can feel like you must live in a perpetual state of discomfort. Mitigate this issue by thoroughly researching Philly’s apartment rental landscape and finding diamonds in the rough. To boost these efforts, streamline your search to up-and-coming neighborhoods in Philly. Why should you prioritize up-and-coming neighborhoods while on a budget? These are areas with exceptional places without being oversaturated. Get in on the ground floor before things take off and become less affordable. For instance, you’re likelier to find a cost-friendly, high-quality apartment in on-the-rise Harrowgate than in a more established spot like Rittenhouse Square. Budgeting requires thorough research and a healthy lay of the land. The best way to get a beat on the Philly rental landscape is to tap into resources (like blogs) from industry experts who can steer you in the right direction. Be Aware Of Your Rights As A Renter On your hunt for budget-friendly apartment rentals, you might encounter landlords and property managers trying to exploit your frugal inclinations. They could mistake your cost-consciousness as a weakness and an excuse to trample on your rights. Familiarize yourself with what you’re entitled to as a renter. One of those rights is habitable living circumstances. Your landlord must legally uphold specific standards regardless of what you pay monthly for your apartment. Click here to learn those standards . Conclusion: Philly Is A Haven For Budget-Conscious Apartment Hunters Who Follow Our Tips Follow the tips suggested in this article, and you’ll be surprised at how seamlessly a budget-friendly apartment falls into your lap. Philadelphia is rich with these hidden gems throughout its accessible, culturally vibrant neighborhoods. We’ll reiterate the need for patience and strategy. These cost-efficient living options won’t materialize from thin air. It will take your keen eye, developed through research and careful calculations, to land you in your desired unit. Help your cause further by contacting an industry expert like GM Holdings with your inquiries. We know the Philly apartment rental landscape like the back of our hands and are happy to provide insights to help you save on rent.
27 Mar, 2024
The body content of your post goes here. To edit this text, click on it and delete this default text and start typing your own or paste your own from a different source.
13 Mar, 2024
This article will address which direction you should go if you’re struggling to decide between the two.
Show More
Share by: