Should You Rent Out or Sell Your Home in Seattle?

“Should I rent out or sell my home in Seattle?” This is the question almost every seller asks me when it’s time to move up to their next home. And there is so much information and misinformation about which option might make the most sense for you. In this post, I am sharing the four questions you need to ask yourself to help you determine whether or not renting out your home or selling your home is the right choice.

1st Question: What Is The State of the Market for Both Renting and Selling?
2nd Question: Can I Qualify For or Afford to Buy the Next House I Want While Still Keeping the Home I Currently Own As a Rental?
3rd Question: Am I Prepared to Be a Landlord in Seattle?
4th Question: Will My Current Home Make a Great Rental Property?

Start Here – Kim’s Video Filmed in Her Newest Greenwood Townhome Listing About “Should I Rent or Sell My Home?”

More Details About the Home in the Video

MLS: 2218228
Address: 10520 WHITMAN AVE N #C SEATTLE, WA 98133
Neighborhood: Greenwood
Price: $549,000
More Information >

Should You Rent Out or Sell Your Home in Seattle?

This is a great question. Our clients, whose home we just listed, were self-managing their rental. For a long time, they were easily renting the home, and then all of a sudden they couldn’t get any interest in the home. They dropped the rent and offered some incentives. And still nothing!

Which made me ask some questions. What happened to the Seattle rental market? We are seeing a massive influx of new rentals coming on the market!

Question #1: What Is The State of the Market for Both Renting and Selling?

Currently, Seattle is leaning into a renter’s market, which is why these sellers were struggling to find a new renter. In 2023, Seattle added around 6,000 new rental units, and this year that number is expected to triple. That means a possible 5% increase in rental units this year. On top of that, many sellers (like ours) chose to rent their homes instead of selling them in the past few years.

What is Happening With the Number of Homes For Sale in Seattle in 2024?

The Seattle metro area has seen a 28% drop in homes for sale since 2022. That’s a huge drop in a market with historically tight inventory. Many of those would be sellers decided to become landlords. Those units are also putting downward pressure on the rental market.

And this is one of the reasons why our sellers decided to SELL instead of rent.

Question #2: Can I Qualify For or Afford to Buy the Next House I Want While Still Keeping the Home I Currently Own As a Rental?

To get this answer, you will want to talk to your loan consultant. There are so many factors to consider with this simple question, including:

How much do I owe?
Do I need money from my home for part or all of the down payment?
How much will my home rent for?
Does renting instead of selling my home hinder my ability to buy up to the next home I truly want or need?

Many of our sellers who are in this situation are unable to have the rent cover their mortgage. And with the shift in the rental market, that is getting harder.

Check out our home loan guide for more information >

Question #3: Am I Prepared to Be a Landlord in Seattle?

Why do I ask this? Because being a landlord in Seattle is not easy. Seattle is very pro-tenant rights, which we wholeheartedly support! They are there for the right reasons.

Many sellers decide to become landlords before becoming aware or educated about these laws. As a landlord, you are beholden to some very restrictive tenant rights laws to avoid fines and violations. We have seen smaller landlords get into a ton of trouble because they just are not prepped for what they need to do.

Start here with the City of Seattle Landlord Laws >

The Washington Tenants Union Also Has Great Resources >

Question #4: Will My Current Home Make a Great Rental Property?

While every home CAN be rented out, not all homes make the best rentals.

Some things to think about are:

Do you have a high-maintenance yard?
Do you have a pool or a hot tub?
Did you recently spend a beaucoup on a fancy kitchen or bathroom?
And if you are living in a condo community, are there any rental restrictions?

These are all important to consider because even the best renters are still renters—not owners. They will not spend 3 hours every week micro-managing a hot tub the way I do, and trust me, they are never taking care of your lawn.

Rentals Can Be a Cash Drain

Watch your $12,000/year profit suddenly turn into $4,000.

If you are making $1,000 extra a month in rental income BUT you need to pay 10% to your property manager, and $300 a month for lawn care, and then replace the carpets and repaint every time a renter turns over… That extra $12,000 a year might become closer to $4,000.

Renting your home means being prepared to spend money on damages, repairs, and maintenance once your renters have gone.

Thank You For Learning About Whether or Not You Should Rent Out or Sell Your Home in Seattle

My goal here is not to discourage you from renting instead of selling. It is more to help you as a homeowner and help you think through all the details of this major decision. For some folks, renting is a fabulous idea. I’ve had clients who rented their homes for years with ZERO issues and were able to make a profit from their rental.

I’ve also had clients spend upwards of $30K on repairs because the renters decided to use their basement as an illegal grow room. And the home was being properly managed, but the property manager did NOT properly vet the renters or check on the home for over 4-5 months to make sure there were no issues.

Those are both extremes. So more than likely your situation will be somewhere in the middle.

The bottom line is that if you are looking to move up and debating the Rent or Sell question, we are here to help you with that answer! Knowing what your home is worth, what it could rent for, and discussing the pros and cons of both are crucial before making this decision.

We are here to help. Our team understands that this process can take a year or two. Give us a call. Our Team loves helping people develop a personalized listing plan for their homes. Feel free to contact us directly at thediva@teamedivarealestate.com or call/text 206-271-0264.