Should I Sell My House in San Francisco, California or Rent It Out?

If you’re considering moving from San Francisco, California, you may wonder if you should sell your house or rent it out.

Look no further for our expert insight into making the right choice.

Finding a new place to love is sometimes the easiest part of a move. Deciding to keep your equity in your current home and rent it out or move on entirely to something new can be a tough choice.

colored traditional houses of Alamo Square in San Francisco, California

2023 real estate market

To make an informed decision regarding whether to sell your spot in San Francisco or rent it out, you must first understand where the current real estate market sits. The real estate market is experiencing what analysts call a rebalancing in the United States.

In San Francisco specifically, the current market is showing a lot of folks leaving the area in search of more affordable housing as work-from-home policies become more widely accepted.

The COVID-19 pandemic made interest rates hit record lows, which sent the real estate world into a tailspin. The inventory was low, home prices skyrocketed, and buyers were often left in offer battles on homes they didn’t even truly love.

Fast-forward to today, and the market is shifting. Mortgage interest rates have increased from the 2020 frenzy, inventory remains low, home prices remain solid, and buyers have a standing chance at landing their dream home due to a chilled-out market environment.

To sell or to rent?

When deciding if you should sell your California property or rent it out, there are some factors to consider. Renting a home is always a gamble.

You could end up with bad renters. In turn, people who don’t care for your property can stifle your investment.

Bad tenants can wrack up damage and repair bills, so you end up losing out on the equity you had.

On the flip side, if you decide to sell the property, you could miss out on profits. Let’s say you get stellar tenants in your home. You can use the paid rent to pay off any existing mortgage, and as the home appreciates, so does your pocketbook. 

Before you decide to rent, consider this:

  • Is the demand for rent high in your area?
  • Do you have a personal attachment to the home?
  • Are you confident you could make a profit on your rental property?

It may be time to sell your home if it is considered a seller’s market. It means a low inventory (our current situation) and high buyer demand.

Other signs you may want to sell include:

  • You can’t charge enough for rent to make a profit (often, the larger the home, the less margin for profit there is)
  • You don’t have enough cash on hand to cover the bills in the event your renter leaves
  • It would be best if you had the equity for other things (i.e., your next down payment)

After reading our insights, you will feel more confident about whether to rent or sell your home in San Francisco, California.

Remember, whatever decision you make, be sure it is the one that makes the most sense for your specific situation.