Should You List Your Home for Rent and for Sale at the Same Time?

Is it a good idea to list your home for rent at the same time you’re listing it for sale? We’ll discuss this topic in the following video.

I’m Nick at Hauseit, based here in New York City. Check out our website https://hauseit.com to learn how to save money on commission and reduce your closing costs when buying and selling real estate in New York City, Long Island and the Hudson Valley. So let’s get started!

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Listing your property for rent at the same time you're trying to sell is a good strategy for increasing optionality and ensuring that you have a successful outcome one-way or another.

If you’re like most sellers, you’ve probably already purchased a larger home or relocated somewhere else. Therefore, your primary and immediate objective is to make sure that you’re not stuck paying the carrying costs for two properties.

While a sale is the ultimate goal for most people, renting out your place for one or two years can help cover your costs while waiting for resale market conditions to improve.

Now, most sellers initially start with just a sale listing, as the preferred outcome is almost always to sell instead of rent.

If market conditions are such that the prospect of a sale appears to be less likely to happen, sellers will often consider listing for rent as well.

We generally recommend starting with just a sale listing and testing that out for roughly four to six weeks before considering listing your home for rent as well.

This slight delay is important, as it allows you to genuinely test the sale market without feeling any form of pressure to accept a rental deal prematurely.

The lifecycle of a rental deal is much faster than for a sale transaction, so if you list your property for sale and for rent on day one, you’ll most likely get much more interest in a rental.

Since renters are more time sensitive than buyers, you may feel pressured to simply move forward with a rental, before it’s even possible for you to determine whether or not resale market conditions are good enough to secure a sale at a price which makes sense for you.

In New York City specifically, it's very common to see properties listed both for sale and for rent.

If you own a co-op apartment in New York City, the prospect of renting out your place instead of selling is much less appealing. This is because rental applications are subject to a similarly onerous board approval process as would be the case with selling. It’s always possible that the co-op will reject the specific application for your prospective tenant, or the co-op might not permit you to rent to anyone full stop.

However, renting your co-op for a year can help cover your costs as you wait for market conditions to improve.

If you own a condo in NYC, you may also want to reconsider selling altogether. If you don’t need the funds from a sale to help with your new purchase, there may be some benefit to holding onto your existing condo as an investment property. Moreover, holding onto your apartment will save you roughly 8% to 10% in NYC seller closing costs.

Before we let you go, let’s briefly discuss the fees associated with renting in NYC. Most condo and co-op buildings charge around $1,000 in combined fees for a rental application. This includes the application fee itself, credit check fees and any move-out fee or deposit. If you’re renting a co-op, you may also be responsible for paying some form of sublet surcharge amount on top of your existing monthly maintenance fee.

You’ll also most likely be responsible for paying a broker fee if you opt for a rental. While tenants have customarily paid rental broker fees in NYC for the past few decades, recent broker fee legislation in 2019 has fundamentally shifted the market towards landlords paying broker fees in most cases.

Aside from fees, there are some tax advantages to holding onto your property as a rental, such as the ability to deduct depreciation and other carrying costs. You’ll also avoid incurring any immediate capital gains taxes by renting instead of selling.

So there you have it! We hope you enjoyed this video, and if you did, please like, subscribe and leave us a comment. We’d greatly appreciate it. I’m Nick at Hauseit, and we’ll seen you on the next video!

Save 6% When Selling in NYC: https://www.hauseit.com/agent-assisted-fsbo/
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