Should I sell or rent my home that I over renovated?

4 Replies

I bought my primary residence in 2010. While living there I renovated 90% of the house, because it was something I enjoyed and thought it would substantially increase my equity. Unfortunately I didn't do my homework and I sunk more money in the house than I can get back out of it if I sell. I have always had an itch to get into real estate investing, so I am considering keeping the house and renting it out when my family and I move to a bigger home this year. We do not need to sell our current house in order to afford our next home. Should we sell or rent our current home?

Hi @Brian Northrop and welcome to BiggerPockets!

Assuming you did a great job on the renovations, and also that you don't live somewhere that restricts doing so, I would lease/purchase the house.

I'd ask for slightly-above market rent, set the purchase price at some reasonable markup from current value, and require 3-4% of the purchase price in non-refundable earnest money to be paid at lease signing.

You'd get all the benefits of renting to a quality tenant and (ideally) a top-dollar sale price with no negotiation, inspection, or buyer commission!

What's done is done. It's called a sunk cost and it is what it is. The amount you spent on it shouldn't shouldn't affect your decision on whether to sell or rent.