What should I know about renting my home instead of selling it?

This has been pretty helpful for a number of my clients: https://www.mysmartmove.com/blog/9-must-know-tips-new-landlords

Run the numbers on both outcomes before you decide. A rental only makes sense if the cash flow exceeds expenses (mortgage, taxes, insurance, maintenance reserve, vacancy reserve, property management if applicable) AND you are willing to hold through cycles. Otherwise selling and redeploying the equity usually wins. In Hernando County, Florida insurance costs have risen 40-plus percent over 3 years, and a landlord policy costs more than a homestead policy. Many Spring Hill homeowners run the math and discover their positive cash flow disappeared when insurance and taxes normalized. Florida also taxes rental income at the non-homestead millage rate, so you lose the Save Our Homes cap and the homestead exemption the year you convert. The move: calculate the after-tax, after-insurance, after-maintenance monthly number and compare it to what the equity would earn invested elsewhere. If the rental yield is under 5 percent after everything, selling usually wins. Sentiment is not a strategy. -- Kevin Neely & Kaitlynd Robbins | K2 Sells

It can be a great move, but only if it works on paper and fits your life. Start with the numbers. If the rent covers your mortgage, taxes, insurance, maintenance, and a buffer for vacancies, you’re in a good spot. If you’re feeding it every month, you’re betting on appreciation. Then think about management. Are you going to handle tenants, repairs, and late payments, or hire a property manager? That cost usually runs around 8 to 10 percent and needs to be factored in. Also plan for the things people forget. Repairs, turnover, and time between tenants. That’s where most surprises come from. Check your loan and insurance too. Some loans have occupancy rules, and you’ll need a landlord policy, not a standard homeowner’s policy. It can build long term wealth if it’s set up right. If the numbers are tight and it adds stress, selling is often the cleaner move.

One of the biggest things people miss in Lee County, Florida is the tax side. If you rent your property for less than 6 months and 1 day, it’s considered a short-term rental, and you’re required to collect both Florida sales tax and the Lee County tourist development tax (the “bed tax”), which adds up to roughly 11%+ that you have to collect and remit. If you rent it for 6 months and 1 day or longer with a proper lease, you avoid that tax entirely, so that decision alone can shape your entire strategy. Beyond that, you’ll want to think about whether you’re going short-term or long-term, because short-term can bring in more income but comes with more work, turnover, and management, while long-term is more predictable but typically lower monthly rent. You’ll also need to look at insurance, since a standard homeowner’s policy usually won’t fully cover a rental, budget for ongoing maintenance and repairs, plan for vacancy periods so you’re not stretched financially, and decide if you’ll manage it yourself or hire someone. On top of that, check any HOA or community rules, because some don’t allow short-term rentals at all, and others have a minimum of 30 days. Lastly, what I have seen surprise a lot of my clients is that when they eventually go to sell, renting can impact their capital gains. Right now, if it’s your primary residence, you may qualify to exclude up to $250,000 in gains ($500,000 for married couples), but you must have lived in the home for 2 out of the last 5 years. Once you turn it into a rental, that clock starts working against you. If you hold it too long as a rental, you could lose some or all of that exclusion, and you may also have to pay depreciation recapture on the time it was rented. That’s why it’s important to think ahead, not just about renting it now, but how long you plan to hold it and what your exit strategy looks like.

Renting is work, think of it as though you are starting a small business. Make sure you screen tenants carefully, budget for repairs, vacancies, and management (whether that's you or hiring a property manager). Make sure that local laws don't prohibit renting in your area.

Great question and one I see more often lately. Renting your home can be a smart move but it is not as passive as people think. Along with rental income comes responsibility. You are now the one handling maintenance, repairs, tenant communication and potential vacancies. It is important to know what your home would realistically rent for and whether that covers your expenses like mortgage, taxes, insurance and upkeep. If it does not, you are covering the difference each month. A few things people do not always think about are landlord tenant laws, which can be very tenant friendly depending on your state, how you will handle repairs or emergencies and whether you want to manage the property yourself or hire someone. There are also tax considerations, so it is worth having a conversation with an accountant. It can be a great long term strategy, but only if it fits your lifestyle and you go into it with a clear plan.

Rent‑vs‑Sell analysis Compare your home’s likely monthly rent (use Zillow, Apartments.com, or local property managers’ comps) to your total monthly costs — mortgage, taxes, insurance, HOA, and maintenance reserves. If rent comfortably exceeds costs or at least covers them while property values are rising, renting may make sense. If you’d still run negative cash flow, selling might be smarter. Tax implications Rental income is taxable, but you can deduct mortgage interest, taxes, insurance, repairs, management fees, and depreciation. When you eventually sell, if you’ve rented it more than 3 years after moving out, you likely lose the primary residence capital‑gains exclusion (the rule that lets you exclude up to $250K/$500K for couples). You’d also have to recapture depreciation at sale — a tax many first‑time landlords miss. A CPA can model both paths. 2. Practical Responsibilities Repairs and upkeep: Being “the landlord” means handling leaky faucets at 11 p.m. or paying someone else to. If that sounds miserable, a property manager (usually 8–10% of rent) can handle tenant screening, maintenance, and rent collection. Tenant screening: Do background and credit checks, verify income, and check references. Georgia law lets you collect application fees for this, but you must treat every applicant fairly under the Fair Housing Act. Insurance: You’ll need a landlord policy (DP‑3) instead of owner‑occupied homeowners' insurance. It covers liability and tenant‑related risks differently. Also notify your mortgage lender — they may require documentation if you convert the home into a rental. 3. Legal Essentials in Georgia Read up on Georgia’s landlord‑tenant law (O.C.G.A. § 44‑7) about security deposits, notice to enter, and eviction procedures. Keep deposits in a separate escrow account, with a move‑in/move‑out condition checklist — Georgia requires this. Prepare clear lease terms spelling out rent amount, due date, late fees, and tenant responsibilities for lawn or pest care. The Georgia Association of REALTORS® rental forms are solid templates. 4. Less‑Obvious Considerations Liquidity: Renting ties up your equity, so you can’t easily tap it for future purchases. Wear and tear: Even with great tenants, rented homes experience faster depreciation. Vacancy periods: Budget for at least 1 month per year of vacancy or turnover. Exit timing: If your area’s housing market improves, be ready with a plan to sell after lease expiration. Local demand: Newnan’s rental market has grown but can shift quickly — check local property managers for current average days‑to‑rent and typical rents by neighborhood. Hope this helps, if you have additional questions feel free to give me a call. In addition to being a Realtor, I own several rental properties.