Should I Rent or Sell My Home in Grand Rapids?
Recently, we’ve been getting a lot of calls from what we call “accidental landlords.” These are homeowners who can’t sell their homes right now without taking a significant loss, so they’re wondering if renting is a better option. Today, let’s explore the question: Should you rent your home, or should you sell it?
Why Renting Your Home Might Make Sense
Renting your Grand Rapids home isn’t just about collecting a check every month. It can be a smart investment strategy in the right situation.
Avoid a Major Loss Right Now
If the market isn’t where you want it to be, renting lets you hold onto your home until things improve. You might not make a huge profit, but often you’ll “lose less” compared to selling at a steep discount.
Build Long-Term Wealth
Over time, your tenant is essentially helping pay down your mortgage. With a professional property manager in your corner, this can turn into a solid long-term investment.
Flexibility for the Future
If you think you may want to move back into the home in a few years, renting keeps that option open.
Refinancing Down the Road
Renting now gives you the chance to refinance later, potentially improving your cash flow.
Tax Benefits
Many rental expenses are tax-deductible. Talk to your accountant, but this can be a nice benefit of renting.
When Selling Might Be the Smarter Move
Renting isn’t for everyone, and in many cases, selling makes more sense if you’re not ready for the responsibilities that come with being a landlord.
You Don’t Have Much in Cash Reserves
Water heater goes out? Furnace dies? Fridge quits? These things happen. If a $1,600 repair would break the bank, selling might be the safer bet.
Negative Cash Flow Is a Burden
Some rentals lose a couple hundred dollars per month. If that would create financial strain, selling makes more sense.
You Need the Equity Now
Maybe you’re looking to pay off debt or buy another home. Renting delays that access to funds.
You Don’t Want to Be a Landlord
Social media can make being a landlord look like “easy money.” In reality, it comes with responsibilities: repairs, tenant communication, and the occasional headache.
You Plan to Sell Within a Year
Planning to rent for 12 months and then sell? Turnover costs like repainting, repairing wear and tear, or replacing scuffed flooring can add up fast. Renting makes more sense if you plan to hold onto the home for at least 2–3 years.
A Few Things to Keep in Mind Before Renting
Property Taxes and Insurance Will Likely Go Up
When your home stops being your primary residence, taxes can jump 40–50%. Insurance will also increase. If you’re in Michigan, there’s a property tax estimator online that can help you run the numbers.
Rental Inspections May Be Required
Many cities, especially here in the Grand Rapids, MI area, require inspections. Some are simple; others are more involved and costly.
Rent Isn’t Always Guaranteed
Most tenants pay on time, but life happens. Be prepared for the occasional late or missed payment.
Long-Term Cash Flow Growth
Rent typically increases 2–3% a year, and in some years (like during COVID) it jumped even more. So even if you break even now, it can look much better a few years down the road.
Portfolio Diversification
Beyond your 401(k) or mutual funds, rental property adds a nice layer of diversification to your portfolio.
So… Rent or Sell?
At Simple Property Management, about 80–90% of homeowners who call us are ultimately better off selling. But for the right person—with some reserves in place, a long-term view, and the right expectations—renting can be a powerful wealth-building tool.
If you’re thinking this through right now, my best advice is: run the numbers honestly, think about your long-term plans, and be realistic about the responsibilities.
If you want help figuring out what’s best for your situation, give us a call at 616-329-6318 or email Jon at jon@simplepmgroup.com. We’re here to help. Contact us today.