Deciding whether to sell your home or keep it as a rental property is a big decision many homeowners face, especially in today’s shifting market. With interest rates fluctuating, home prices still rising, and the rental market continuing to grow, it’s easy to feel uncertain about the best move for your property.

There are a few important questions to ask yourself before deciding what option is right for you. These questions will help you weigh the pros and cons of each option and make an informed decision that fits your financial goals and lifestyle. Here are the three most important factors to consider before you choose whether to sell or rent out your home.

1. Do You Have Enough Money to Buy Another Home Without Selling Your Current One?

Buying a home isn’t cheap. Between your down payment, closing costs, inspections, and moving expenses, you could easily be looking at $20,000-$30,000 upfront. If you don’t have that kind of cash on hand or an established plan to get it, selling may be your only viable option.

If you do have the funds to access them, holding onto your home as a rental may be possible.

2. Will It Actually Cash Flow?

This might be the most important question on the list. A lot of people assume that if rent covers the mortgage, they’re good to go, but that’s not quite the full picture.

Let’s say your mortgage is $2,500 per month, and you can rent out your home for the same amount. That’s break-even on paper, but you’ll still be on the hook for:

Repairs and maintenance
Vacancies
Landlord insurance (separate from homeowner’s insurance)
Property management fees (typically 8-10%)
Unexpected expenses always come up.

We recommend aiming for at least $500 per month in positive cash flow to make it worth the risk. That kind of buffer gives you room to breathe when something inevitably needs fixing or your property sits empty for a month.

A helpful note, in Oregon, average rent increases around 3% per year with a legal cap of 10%. So your cash flow can improve over time.

3. Are You Comfortable with Oregon’s Tenant Laws?

Oregon has some of the strictest tenant protections in the country, so before you commit to becoming a landlord, make sure you’re comfortable with what that involves.

A few key points to know:

Rent increases are limited to once per year, and they’re capped.
Evictions can be complex and time-consuming, even when legally justified.
Tenant screening laws are strict; you can’t deny a qualified tenant just because of a gut feeling.

If that sounds overwhelming, it doesn’t mean you shouldn’t rent out your home. But it does mean you need to be prepared or work with a professional property manager who understands Oregon law inside and out.

What Are the Upsides?

This all might sound a little stressful, so let’s discuss why people choose to rent out their homes: building long-term wealth.

Real estate appreciation in Oregon tends to range between 4% and 6% per year. Even in slower years, 2-4% is common. That means if you’re holding onto a $500,000 property and it appreciates 5% in a year, you’ve gained $25,000 without doing much at all.

On top of that, if your property is generating positive cash flow, you’re adding another source of passive income. When you compare that to what you’d need to earn a similar return in the stock market or elsewhere, real estate comes out looking pretty good.

What’s Right for You?

There is no one-size-fits-all answer here. Selling a home comes with costs just like holding onto one does. But if you take the time to run the numbers and honestly answer these three questions, you’ll have a much clearer idea of what’s right for you.

Need Help Deciding?

If you’re within 45 minutes of Newberg, our team is happy to sit down with you and walk through the options. We’re committed to helping people make the best decisions for their long-term goals. Ready to explore your next move? Reach out today!

Thinking of investing in Oregon real estate? Check out our video on what to know before becoming a landlord.

Should You Sell Your Home or Keep It as a Rental? 3 Questions to Ask Yourself