Rent Out or Sell Your Las Vegas Home? How to Decide

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Renting It Out or Selling It

Start with your own numbers, not a rule of thumb

The short answer: renting out works when a realistic rent covers the full cost of owning the home with room for empty months and repairs, you are ready to be a landlord or to pay someone to be one, and keeping the home fits your plans. Selling is usually the better answer when the rent only works in a best-case month, the home needs work you do not want to fund, you need the equity, or renting would cost you a tax exclusion worth more than the rent. Get a rent figure for your home, put it next to your costs, and take the tax question to a CPA before you choose.

We manage rentals, so you might expect this page to tell you to rent. It will not. A home that should have been sold makes an unhappy rental for everyone, including the manager.

The Situations That Bring Owners Here

• Relocating for work. If you might move back, renting keeps that option open. If you will not, the real question is whether you want to own a home in a city you no longer live in. Owning from out of state covers what that involves.
• PCS orders. Your timeline is set by your orders, and the tax rules below have a provision for service members. See military PCS property management.
• An inherited home. Whether you can rent or sell it yet depends on how the estate is being settled. That is a question for the estate’s attorney before it is a question for us.
• Downsizing or moving in with family. Often the clearest case for running the numbers both ways, because the equity may be what pays for the next home.

Put the Rent Next to What the Home Costs You

A rental pays when the rent covers more than the mortgage. Write down every cost of keeping the home for a year:

• The mortgage, principal and interest.
• Property tax. Nevada’s 3% cap on yearly increases applies to a primary residence, and a home rented to someone else does not count as one (NRS 361.4723(7)). A rental falls under a separate cap worked out each year by formula, which can be higher than 3% but not more than 8% (NRS 361.4722). Ask the Clark County Assessor how it applies to your parcel.
• Insurance written for a rented home, which is a different policy from homeowners cover. See landlord insurance versus homeowners insurance, and confirm with a licensed agent.
• HOA dues, and whatever the association requires of rentals. See HOA rules for rental owners.
• Repairs and maintenance. Air conditioning, water heaters and irrigation work hard here, and they are your bill as the landlord.
• Empty months between tenants, when the rent stops and the costs do not. See what a vacant rental costs you.
• Management, if you hire it. See what property management fees mean and what our package includes.

We will not hand you an average Las Vegas rent to plug in. Published figures for this market disagree widely, for reasons the Las Vegas rental market page explains. What matters is what your home would rent for, priced against comparable rentals near it.

Repairs Before You Rent

A home you lived in comfortably is not always ready for a tenant. Systems need servicing, worn finishes show in listing photos, and anything that fails in the first month becomes your problem at a bad time. The rent-ready checklist sets out what to check. If the list is long and you would rather not fund it, that is a point for selling.

The Landlord Job

Renting means a tenant, a lease that meets Nevada’s requirements, a deposit handled to the legal deadline, notice before you enter, and a phone call when the air conditioning fails in July. Nevada does not require you to hire a manager to rent out your own home. You can do it yourself or pay someone to; hiring a manager versus self-managing sets out both honestly, and the first-time landlord guide covers the first ninety days.

The Tax Question to Settle With a CPA

This is often the part that decides it, and it depends on your own dates. Three points from IRS Publication 523, Selling Your Home:

• The home-sale exclusion. If you owned the home and lived in it as your main home for at least 24 months of the 5 years before the sale, you may be able to exclude up to $250,000 of gain from your income, or $500,000 for a married couple filing jointly. Renting the home out uses up that window: after about three years as a rental, you can no longer show 24 months of residence in the last five years.
• Depreciation. If depreciation was allowed or allowable on the home while it was rented, the exclusion does not cover the part of your gain equal to that depreciation (for periods after May 6, 1997), so that part may be taxed when you sell.
• Service members. Members of the uniformed services on qualified official extended duty may choose to suspend the 5-year test period, for up to 10 years.

None of this is tax advice. Take your purchase date, move-out date and figures to a CPA before you decide.

When Selling Is the Better Answer

• The rent will not cover the full cost of owning, and the plan depends on the home rising in value. Nobody can promise that, and we will not.
• The home needs major work before a tenant could move in, and you would rather not pay for it.
• You need the equity for your next home.
• Your HOA caps or restricts rentals, or sets terms you cannot meet.
• The tax exclusion is worth more to you than the rent, and your window is closing.
• You do not want to be a landlord, and the numbers leave no room to pay someone else to be one.

If that is where you land, the next call is to a listing agent rather than a property manager.

When Renting Out Makes Sense

• A realistic rent covers what the home costs you, with room for empty months and repairs.
• You may want the home back, or you plan to hold it for years.
• Your HOA allows rentals on terms you can work with.
• You are ready for the landlord work, or for the cost of having it done.

Next Step

Get a free rental analysis to compare with a sale. It tells you what your home should rent for against comparable rentals nearby, with no obligation, so you can set the rent beside your costs and beside what a sale would leave you.