In today’s market, some sellers—frustrated by lower-than-expected offers—consider holding onto their property and renting it out instead of selling. On the surface, this seems like a smart way to cover carrying costs and “tread water” until the market improves. But becoming an accidental landlord isn’t always the best move, and it’s important to weigh both the benefits and drawbacks before deciding.
The Upside of Renting
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Cash Flow Support – Rental income can help offset mortgage payments, HOA fees, insurance, and taxes.
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Market Timing Flexibility – Holding onto the property gives you time to wait for better market conditions.
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Potential Appreciation – If the market rebounds, you could sell later at a higher price while having already covered expenses through rental income.
The Hidden Challenges
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Tenant Risks – Late payments, property damage, or costly evictions can erode profits quickly.
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Maintenance Costs – Rental properties often experience heavier wear and tear, especially in vacation or short-term markets.
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Management Burden – Screening tenants, handling repairs, and staying compliant with landlord-tenant laws can become time-consuming and stressful. Many owners end up hiring a property manager to handle these tasks. While it relieves the burden, management fees typically run 8–10% of the gross monthly rent, reducing your net income.
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Selling While Renting – Trying to list and rent at the same time often backfires. Buyer agents may skip your home if showing appointments require long lead times to accommodate tenants. Even when showings do happen, tenants aren’t obligated to keep the home in “show-ready” condition, which can drastically hurt first impressions.
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Insurance Issues – A property that shifts from an owner-occupied residence to a rental requires different coverage. Failing to update the policy can leave you exposed if there’s a claim.
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Mortgage Restrictions – Many loan documents prohibit converting a primary residence into a rental within a certain timeframe. Violating these terms may trigger penalties—or even technical default—if the lender discovers the change.
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Tax Considerations – Rental income is taxable, and converting a primary residence into a rental may impact your capital gains tax exemption when you eventually sell.
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Market Reality – In many cases, rents may not fully cover all carrying costs, meaning you’re still subsidizing ownership.
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Rental Market Saturation – Weakness in the sales market often spills over into the rental market. As more frustrated sellers become accidental landlords, rental inventory grows. This can depress rents and increase the risk of extended vacancies, further undermining the “safety net” sellers expect from renting.
Bottom Line
While renting out your home can be a useful short-term strategy, it’s not always the simple solution it appears to be. For many sellers, it ends up being a stopgap that adds stress without solving the underlying problem. Before making the leap, it’s wise to carefully analyze your financial situation, understand the landlord responsibilities, and speak with a trusted real estate professional.
Sometimes, selling—even at a lower price than hoped—provides the cleanest path forward. Other times, a well-planned rental strategy can bridge the gap. The key is making the choice intentionally, not accidentally.