Sell or Rent? How to Decide What to Do with Your Primary Home or Condo

When it’s time to move on from your current home, whether due to a job relocation, upsizing for a growing family, or simply a lifestyle change, one of the biggest financial decisions you’ll face is what to do with your existing property: sell it or turn it into a rental?

Both options come with benefits and trade-offs, and the right choice depends on your financial goals, market conditions, and long-term plans. Here are some key factors to consider when weighing your decision.

1. Financial Goals and Cash Flow Needs

• Selling your home can provide a lump sum of cash that you can use for a down payment on your next home, pay down debt, invest, or build up savings. If your property has appreciated significantly, you may qualify for a capital gains exclusion—up to $250,000 for single filers or $500,000 for married couples—if you’ve lived there for two of the last five years.

  
  

• Renting can create a new stream of passive income. However, rental income must cover your mortgage, property taxes, insurance, maintenance, and potentially property management fees to be worthwhile. Cash flow projections are essential before converting a home into a rental.

2. Real Estate Market Conditions

• Is it a seller’s market? If demand is high and prices are strong, you may want to lock in your gains and sell while the timing is favorable.

  
  

• Is it a renter’s market in your area? High rental demand and rising rents could make holding the property a financially attractive option, especially if you’re not in a hurry to cash out.

  
  

3. Property Suitability as a Rental

Not every primary home makes a great rental. Ask yourself:

• Is the layout and location appealing to tenants?

• Are there major repairs or upgrades needed before it’s rent-ready?

• Is there an HOA that restricts rentals or imposes extra fees?

Some properties are more “landlord-friendly” than others.

4. Tax Considerations

• Selling a primary residence often comes with favorable tax treatment (Section 121 exclusion). But if you convert it to a rental, that window can close over time.

  
  

• Renting opens up tax deductions for things like depreciation, repairs, and mortgage interest—but it also requires good recordkeeping and may lead to future capital gains taxes when you eventually sell.

  
  

It's wise to consult with a tax advisor to fully understand the implications.

5. Time and Management Commitment

Being a landlord isn’t passive—especially if you’re managing the property yourself.

• Are you ready to handle tenant screening, maintenance, and late-night calls?

  
  

• Would you hire a property manager? That could eat into your profit margin, but may be necessary if you’re moving out of the area.

  
  

6. Future Plans and Flexibility

Do you envision moving back someday? If yes, keeping the property might be worth it—especially in a growing market.

If not, selling may simplify your finances and reduce risk. Holding on to real estate can tie up equity and limit your ability to qualify for a new mortgage.

Bottom Line

There’s no one-size-fits-all answer. The right decision depends on your financial picture, goals, and risk tolerance. Many of my clients weigh both options using a side-by-side analysis of potential outcomes over 5, 10, or even 20 years.

If you’re thinking through this decision, we can help you evaluate the numbers, tax implications, and long-term planning impact. Let’s talk about what makes the most sense for your situation.

Want help modeling your options? Schedule a consultation at www.RigdenCapital.com

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Rigden Capital Strategies was founded on a simple belief: financial advice should be personal, transparent, and centered around your goals—not built on generic models or product-driven sales. With decades of combined industry experience, we’ve developed a process grounded in three core values: value, integrity, and progress.

As a fee-only fiduciary, we provide personalized, goals-based wealth planning services designed to adapt with your life. Our services include investment management, retirement and tax planning, and estate coordination. We use a mix of active and passive strategies to help clients navigate market changes with clarity and confidence.

We believe in building real relationships and delivering clear, actionable strategies—focused on long-term planning and aligned with your objectives.

Your goals, our strategies. Together, let’s make your goals happen.

Disclosure: This content is for informational and educational purposes only and should not be interpreted as financial, legal, or tax advice. While we strive for accuracy, we do not guarantee the completeness or reliability of the information provided. Investment decisions should be based on individual circumstances, and we recommend consulting a qualified professional before implementing any financial, legal, or tax strategies. Past performance is not indicative of future results, and all investments carry risks, including potential loss of principal. No investment strategy can guarantee success or protect against loss in all market conditions. Investors should carefully consider their risk tolerance, investment objectives, and financial circumstances before making investment decisions.