Should I Rent or Sell My House?
Should I Rent or Sell My House? A Guide for Snohomish, Skagit and North King County Homeowners
If you’re considering a move, you may be asking: Should I sell my house or keep it as a rental?
Maybe you have a low mortgage rate you hate to give up. Maybe you like the idea of rental income. Or maybe you’re wondering whether selling now would make your next move easier.
The answer? "It depends"
Renting may make sense if the home produces enough income after expenses, you have cash reserves, and you want to own a rental longer term. However selling may make more sense if you need your equity, want fewer responsibilities, or the rental numbers leave little room for unexpected headaches and costs.
For homeowners in Snohomish County, Skagit County, King County, and beyond, the right answer starts with your specific property, your situation, and your goals.
Below, let's run through some high level considerations when pondering whether to rent or sell your existing home. Please note that before making such a decision, it's always a good idea to speak with a professional (real estate attorney, CPA, financial advisor, and/or real estate broker) to bounce your ideas off of them, as well as validate any estimates you've arrived at.
Start With What You Want Your Next Chapter to Look Like
Before looking at rental listings or home values, ask yourself:
Do I need the money from this house to buy my next home?
Am I moving temporarily, or am I unlikely to return?
Do I want to own and manage a rental property?
Could I comfortably cover both homes if rent stopped coming in?
Would keeping this house help my retirement plans, or hinder and add stress?
A rental can be a useful investment. It can also become a second job. Selling can free up money and simplify your life, even when keeping the home looks appealing on paper.
Neither choice is automatically better. The goal is to think through the variables and make a decision that best fits you and your family's needs - now and looking forward.
When Selling Your House May Make More Sense
You need access to your equity
Your home’s equity may help fund a down payment, reduce debt, build retirement savings or cover a move closer to family.
Selling expenses may include negotiated brokerage compensation, applicable real estate excise tax, title and escrow charges, preparation costs and buyer concessions.
The amount you may walk away with depends on your property and the actual transaction.
Use a Seller Net Sheet to estimate the amount of equity you'd actually walk away with. I've created one here, or search for one online (your agent or a title & escrow company should also have one you could use).
Please understand that Seller Net Sheet outputs are estimates only. There are many variables and factors that can affect the actual home sale transaction.
Does the rental leave you with little breathing room?
If the rent barely covers your mortgage, the property could potentially require regular contributions from your household budget once repairs, vacancies, and other expected (and unexpected) costs are included.
This doesn’t automatically disqualify renting it as an option, but you should determine how much you'd need to contribute and why keeping the property is worth that cost.
You want less responsibility
If you’re relocating, downsizing or retiring, being responsible for another roof, furnace and set of appliances may not fit your plans.
A property manager can handle much of the day-to-day work (usually at a recurring monthly cost of 8% to 12% of the monthly rent + other fees and repair costs). You still own the financial risk and pay for repairs (potentially with a mark up from the property manager).
Here's a good article on the costs of a Property Management service, and things to consider if determining whether to use one or not.
I've never used a property management company and have been self-managing multiple rentals for 20 years. I'd be more than happy to share my experiences (good and bad) and insight to help you decide.
You don’t want so much of your money tied to one property
A home can represent a large share of your wealth. Selling gives you options for using that equity elsewhere, depending on your needs and financial plan.
Ask yourself: If I had the proceeds in cash today, would I choose to buy this house as a rental?
That question can help separate a good investment decision from the understandable desire to hold on to a familiar home.
When Keeping Your House as a Rental May Make Sense
The numbers work after realistic expenses are factored
A promising rental should be evaluated using a supportable rent estimate, a complete expense budget, and room for things to go wrong.
A low mortgage payment can help. So can a home in good condition with manageable operating costs.
You have reserves beyond your moving budget
Even a well-maintained home can need an unexpected and costly repair. Vacancies or missed payments can also interrupt income.
Before renting, decide how much cash you will keep available for the property. Base that reserve on its condition, monthly carrying costs, and your ability to cover a shortfall.
You want to hold the home for several years
Renting may be a better fit when you have a clear long-term ownership plan. There are costs to preparing a rental, placing a tenant, and handling turnover.
As a real-life example, we kept our last home as a rental since we love the location, yard, and layout (a smaller single story rambler). Our plan is to sell our current, larger home and downsize back to our rental once the kids have moved on, and we desire less space to maintain and single story living.
If your plan is simply to rent for a few months and sell, look carefully at those costs, lease commitments and your eventual selling timeline.
You may return to the area
Keeping your home could be appealing if a job assignment or family move is temporary.
However, signing a lease affects when you can regain possession. Get a real estate attorney's advice about the lease and applicable requirements before assuming you can move back within a specific time frame.
Does the Rent Actually Cover the Cost?
One of the easiest mistakes is subtracting the mortgage from the rent and calling the difference profit.
Example - not a local rent estimate or a quote for management services:
Monthly item | Amount |
Expected Monthly Rent | $3,200 |
Mortgage principal and interest | −$1,850 |
Property taxes | −$500 |
Landlord insurance | −$150 |
HOA dues | −$75 |
Property management allowance | −$256 |
Vacancy allowance | −$160 |
Owner paid utilities | −$160 |
Maintenance and Repair Reserves | −$200 |
Estimated cash flow after reserves, before income taxes | −$151 |
In this example, rent exceeds principal and interest by $1,350. BUT, after the other costs and reserves, the owner would budget for a $151 monthly shortfall.
If taxes and insurance are already included in your mortgage payment, don’t count them twice. Also consider owner-paid utilities, leasing fees, licensing, accounting and turnover expenses where applicable.
Reserve amounts aren’t necessarily spent every month, but setting money aside helps prepare for unexpected costs. Cash flow is also different from taxable income; mortgage principal and reserve contributions are not automatically deductible expenses. Talk to your accountant as to what can be amortized and deducted.
There is a key piece of financials that's left from this basic calculation, and that's your tax deductions and savings that you may be able to realize with a rental. You can deduct your mortgage interest and other expenses (there are limits however), and depreciate the structure and other capital expenses. However, since this varies based on your financial situation and State, I've left it off. This is an example where its so important to work with a CPA / Accountant to run through your specifics. You can learn more about the basics of what can be deducted, depreciated, and any limits from this article at Investopedia.
Run several scenarios with lower rent, a longer vacancy and a varying repair costs. If any versions would put you in a difficult position, the property may carry more risk than you want. Remember, the rental market can be dynamic. Rents can go down, and insurance costs can (and will) go up.
Compare Rental Income With the Equity You Would Leave in the Home
Positive cash flow is a good starting point, but it doesn’t tell the whole story.
Suppose a home could provide $300,000 in net sale proceeds before applicable income taxes. If keeping it produces $3,000 a year in cash flow after expenses and reserves, that is a 1% annual cash yield on those forgone proceeds.
That isn’t the total investment return. Mortgage principal paydown, changes in value, taxes and eventual selling expenses also matter.
It does raise a useful question: Is the expected return worth keeping that much money committed to the house?
Compare renting and selling over the same time period. Include a scenario with no appreciation and one with a decline in value. Talk to a licensed real estate agent about historical home value appreciation for your area and neighborhood. They can also provide their opinioin on the market outlook. Values over time vary greatly depending on the area.
Future price growth should be a possibility in your planning, not a sure-thing for the plan to work.
How the Decision Varies Across Our Local Communities
A countywide average can provide context, but it won’t tell you what your particular home would rent or sell for.
Renting or selling a house in Snohomish County
If you own in Everett, Mill Creek, Lynnwood, Edmonds, Mukilteo, Marysville, Lake Stevens, Monroe or Snohomish, compare nearby homes with similar size, condition, and features. The same applies to communities and neighborhoods such as Silver Firs. Parking, outdoor space, maintenance needs and access to everyday destinations can affect how your home compares with other options.
If you own a home with an HOA, be sure to contact your HOA board and check your Declaration of Covenants, Conditions, and Restrictions (CC&Rs) to determine if you can actually rent your home.
There are HOA's that restrict rentals completely, or only allow a certain percentage of the homes to be rented. In Gold Creek, they do not allow rentals per the CC&R's.
For a Snohomish County rent-versus-sell analysis, I would start with two separate questions:
What would buyers likely pay?
What rent could the home reasonably support?
To estimate monthly rent, you can start with online estimates. Many of the same home search sites that offer home value estimates, also provide rent estimates. There are other sites such as Rentometer that provide estimates as well. But don't rely completely on these values. Check to see what’s currently available for rent nearby based on similar home and yard attributes (Zillow, Realtor.com, Redfin, etc). Also check Facebook marketplace, Craigslist, and others.
Renting or selling a house in Skagit County
For homeowners in Mount Vernon, Burlington, Sedro-Woolley and Anacortes, use comparable properties that reflect the home’s location and setting.
An in-town house, an acreage property and a coastal home can have very different ownership costs. Where applicable, include well and septic maintenance, larger grounds, outbuildings and other property-specific expenses.
Avoid relying on a rent estimate from another community simply because the homes have the same number of bedrooms.
Renting or selling a house in North King County
For properties in Shoreline, Kenmore, Lake Forest Park, Woodinville and the King County portion of Bothell, look closely at the competition for both buyers and renters.
Compare the property’s condition, layout, transportation access, parking and ongoing costs. Confirm the exact city and county jurisdiction, too, since local rental requirements may differ.
Across all three areas, the most useful comparison is based on your address - not a broad assumption that an entire county is a good place to rent or sell.
Check the Tax Timing Before You Turn Your Home Into a Rental
Converting a primary residence to a rental can affect the taxes due when you eventually sell.
Under federal rules, eligible homeowners may exclude up to $250,000 of home-sale gain, or up to $500,000 for qualifying married couples filing jointly. Generally, the ownership and residence tests look at at least two years during the five years before the sale; additional conditions apply.
Renting after moving out does not automatically eliminate eligibility, but waiting can change the result. Depreciation allowed or allowable during rental use can also create taxable gain that is not covered by the exclusion.
Before signing a lease, ask your Accountant or CPA how selling now versus renting would affect your specific situation and timeline.
Sources: IRS home-sale guidance and IRS Publication 523.
Understand the Responsibilities of Becoming a Washington Landlord
Before offering your home for rent, review Washington State's landlord-tenant requirements and any applicable local rules. Understand any specific county, city, and even HOA rental restrictions or requirements.
Washington has a rent stabilization law that limits certain rent increases, with exemptions and notice requirements. Don’t assume you can increase rent whenever your expenses rise. Per RCW 59.18.720: "...landlord can raise your rent and any other recurring or periodic charges identified in the rental agreement for use and occupancy of your rental unit once every 12 months by up to seven percent plus consumer price index, or 10 percent, whichever is less, as allowed by RCW 59.18.700."
Other items to review with qualified professionals include tenant screening and fair housing, deposits, property condition, repairs, entry notices and ending a tenancy. Also check your HOA documents, loan terms and insurance coverage.
Start with the Washington Attorney General’s landlord-tenant resources, then confirm the requirements for your property’s jurisdiction.
Also review Washington State Chapter 59.18 RCW, Residential Landlord-Tenant Act
What If Your House Hasn’t Sold?
Renting can feel like an easy backup plan when a listing hasn’t received the offer you hoped for.
Before making that switch, compare:
Likely net proceeds at a realistic selling price.
The cost of continuing to hold the home for sale.
Rental preparation and leasing costs.
Expected cash flow and reserves.
How a lease would affect a future sale.
A lower sale price may still leave you better positioned than a rental with ongoing expenses and potential losses. In other cases, keeping the home may fit your longer-term plans.
The decision should stand on its own rental numbers, rather than depend on recovering a hoped-for sale price later.
Frequently Asked Questions
Should I keep my house because I have a low mortgage rate?
A low rate is valuable, but it is only one part of the equation. Consider cash flow, repairs, available equity, and whether you want the responsibilities of ownership.
Can I rent out my house and buy another one?
Possibly. Ask your lender how keeping the property would affect your qualification, required reserves and treatment of anticipated rental income. Don’t assume all projected rent will count.
Is it better to sell before retiring?
Selling may simplify your finances and make equity available. Keeping a rental may fit an income plan if the property’s expenses, reserves, and management needs are manageable. Compare both options with your retirement goals.
Can I sell my house after renting it out?
Yes, but lease terms, tenant rights, notice requirements and tax consequences can affect the process, and the amount you net. Plan your exit before entering a rental agreement. Talk to an accountant or CPA.
How do I find out what my house would rent or sell for?
Request separate rental and sales comparisons using similar nearby properties. Then pair those estimates with a rental expense budget and seller net sheet. A local real estate broker familiar with both residential sales and rentals should be able to assist you at not cost or obligation.
Get a Clear Rent-versus-Sell Comparison for Your Home
You don’t have to make this decision based on online estimates, assumptions, gut-feel, or a neighbor’s experience.
As a local real estate broker and rental property owner, I can help you compare your potential selling price, estimated sale proceeds, rental potential, and the practical tradeoffs of keeping the home.
If you own a home in Snohomish County, Skagit County or North King County, let’s look at what each option could mean for you. I own rentals in all three counties, so can provide insight on owning, and renting within these counties.
If you have any questions, or would like any help, feel free to contact me for a personalized rent-versus-sell comparison.
Rent or Sell Tool
With the help of AI, I've created the following tool to provide guidance for home owners looking to purchase their next home and considering renting their existing home, rather than sell it.
Please let me know what you think about this tool. It's a beta version, so please do not rely on this tool to make your final decision and always consult with a real estate agent, broker, attorney and/or CPA or financial consultant.
This article and tool provide general information, not individualized tax, legal, lending or investment advice. Consult the appropriate professionals about your circumstances. Examples are illustrative; rental income, appreciation and investment returns are not guaranteed.
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