Tempted To Rent Instead of Sell? Avoid Becoming an Accidental Landlord

If your house is on the market but you haven’t gotten any offers you’re comfortable with, you may be wondering: what do I do if it doesn’t sell? And for a growing number of homeowners, that’s turning into a new dilemma: should I just rent it instead? There’s a term for this in the industry, and it’s called an accidental landlord.

Here’s how Yahoo Finance defines it:

“These ‘accidental landlords’ are homeowners who tried to sell but couldn’t fetch the price they wanted — and instead have decided to rent out their homes until conditions improve.”

Why This Is Happening More Often Right Now

And right now, the number of homeowners turning into accidental landlords is rising. Business Insider explains why:

“While there have always been accidental landlords . . . an era of middling home sales brought on by a steep rise in borrowing rates — is minting a new wave of reluctant rental owners.”

Basically, sales have slowed down as buyers struggle with today’s affordability challenges. That is leaving some homeowners with listings that sit and go stale. If they are not willing to lower the price to attract buyers, they may consider renting instead. But here is the thing to keep in mind if renting your house has crossed your mind: becoming an accidental landlord was probably not your original plan, and there is likely a good reason for that. It comes with far more responsibility and risk than most people expect.

So, if you find yourself toying with that option, ask yourself these questions first:

1. Does Your House Have Potential as a Profitable Rental?

Just because you can rent it does not always mean you should. That is a common pitfall for many people who become an accidental landlord without fully thinking it through. For example:

• Are you moving out of state? Managing maintenance from far away isn’t easy.
• Does the home need repairs before it’s rental-ready? And do you have the time or the funds for that?
• Is your neighborhood one that typically attracts renters, and would your house be profitable as one?

If any of those questions give you pause, it may be a sign that renting is not the right move and that selling your home could be a smarter, more manageable option.

2. Are You Ready To Be a Landlord?

On paper, renting sounds like easy passive income. In reality, it often looks more like this:

• Midnight calls about clogged toilets or broken air conditioners
• Chasing down missed rent payments
• Damage you’ll have to fix between tenants

As Redfin notes:

“Landlords have to fix things like broken pipes, defunct HVAC systems, and structural damage, among other essential repairs. If you don’t have a few thousand dollars on hand to take care of these repairs, you could end up in a bind.”

3. Have You Thought Through the True Costs?

According to Bankrate, here are just a few of the hidden costs that come with renting out your home:

• A higher insurance premium (landlord insurance typically costs about 25% more)
• Management fees (if you use a property manager, they typically charge around 10% of the rent)
• Maintenance and advertising to find tenants
• Gaps between tenants, where you cover the mortgage without rental income coming in

All of that adds up, fast.

While renting can be a smart move for the right person with the right house, if you’re only considering it because your listing didn’t get traction, you may be stepping into accidental landlord territory without realizing it. Instead of making that shift, there may be a better solution: talk to your current agent and revisit the pricing strategy on your house. With their advice, you can rework your strategy, relaunch at the right price, and attract real buyers to make the sale happen.

Bottom Line

Before you decide to rent your house, take a moment to carefully weigh the pros and cons of becoming an accidental landlord. For many homeowners, the hassle, hidden costs, and unexpected responsibilities may not be worth it.

If you are exploring your options, let’s connect to talk through the best strategy for your goals and see if selling is still the smartest move.

The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Jess & Co. Real Estate, LLC does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Jess & Co. Real Estate, LLC will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.