Why Some Would-Be Sellers Are Renting Out Their Homes Instead

In markets where demand for luxury rentals is high but supply is low, homeowners looking to relocate are faced with a dilemma: to sell or rent? Home sellers in popular real estate markets such as Phoenix and Tampa, Fla., are receiving multiple bids and attracting offers well above list price, but that doesn’t mean selling is the best option, according to Realtor.com.

The luxury market is seeing strong demand for second homes, but in many cases, those occupants would prefer to rent rather than buy. Homeowners who have a low rate of 3% or 4% can cover monthly mortgage payments on their existing homes with the rent they accrue from new tenants. Whether renting is more profitable than selling depends on location, however.

In the Tampa, Sarasota and St. Petersburg areas in Florida, demand is high and supply is low for luxury homes, including both rentals and sales, said Liane Jamason, broker/owner of Corcoran Dwellings in Sarasota, Florida.

“Homeowners can sell for a great price right now, often with multiple bids and over the asking price,” Jamason said. “But there are plenty of professional athletes and millionaires from other states who are relocating here or want a second home but prefer to rent and get to know the area before they buy, so renting can be lucrative, too.”

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