Relocating for a new job, residency, fellowship, family needs, or another opportunity can leave you with a major financial decision:
Should you sell or rent your home when relocating?
We see this situation often throughout Chicago and the surrounding suburbs. A physician finishes residency and accepts a fellowship in another state. A professional takes a new job across the country. A family moves from a Chicago condo to a larger suburban home. In each situation, a primary residence suddenly has the potential to become a rental property.
Keeping the home can be a smart long-term decision, but it can also create more expense and responsibility than expected.
After managing thousands of residential and commercial rental properties throughout Chicagoland, I would start with one question:
If you did not already own this house, would you buy it today as an investment property?
That question helps remove emotion from the decision. Once you move out, your current home needs to make sense financially and practically as a rental.
How to Decide Whether to Sell or Rent Your Home When Relocating
The answer depends on much more than whether you can find a tenant.
You need to understand what the home could realistically rent for, the full cost of keeping it, how much you could receive from selling, the strength of local rental demand, and what repairs or improvements may be coming.
You also need to decide who will manage the home after you leave.
For doctors and physicians relocating for residency, fellowship, an attending position, or another medical career opportunity, time can be just as important as money. A rental may work financially but still be a poor fit if managing it requires more involvement than your schedule allows.
The goal is to look at the complete picture before deciding.
What Could Your Home Realistically Rent For?
Start with a realistic estimate of monthly rent.
That number should come from comparable rentals and current market conditions, not what you hope to receive or what you need to cover your mortgage.
Rental values throughout the Chicago area vary significantly based on location and property type.
A one-bedroom rental condo in Lakeview may compete with large apartment buildings offering amenities, parking, and leasing incentives. A two-flat in Logan Square or Avondale has a different renter profile and different maintenance considerations. A single-family house in Naperville, Plainfield, or Orland Park may appeal to tenants looking for more space and a longer-term home.
Even within the same neighborhood, rent can vary based on bedroom count, parking, condition, outdoor space, in-unit laundry, layout, transportation access, and other features tenants value.
Before deciding to keep your former home, get a rental analysis based on actual comparable properties in your market. Without a realistic rental rate, it is difficult to know whether the rest of the numbers make sense.
Talking to a property manager before making your decision can also help you better understand local rental demand, realistic pricing, and what tenants are looking for in your specific market.
Compare the Cost of Renting With the Cost of Selling
Homeowners often spend a lot of time calculating what it will cost to keep a house and very little time comparing that with the cost of selling.
Both options have expenses.
If you keep the home, your costs may include the mortgage, property taxes, landlord insurance, HOA assessments, routine maintenance, repairs, vacancy, turnover expenses, capital improvements, leasing expenses, property management, and any utilities or local compliance costs that remain your responsibility.
Selling has costs too. Real estate agent commissions when applicable, attorney and closing costs, repairs or improvements before listing, and potential tax consequences can all affect your final sale proceeds.
The goal is to compare what you could realistically walk away with after selling against the long-term financial potential of keeping the house. Selling provides access to your equity and a clean break from the home. Renting allows you to maintain ownership while potentially generating rental income and continuing to build equity.
Neither choice is automatically better.
Try our FREE rent vs. sell calculator for a better idea!
Do Not Compare Rent to Your Mortgage Alone
This is one of the most common mistakes I see homeowners make when considering their first rental property. Suppose your mortgage payment is $2,000 per month and the house could rent for $2,800. It may look like the property will generate $800 per month in additional income.
That is not your true cash flow.
Property taxes, insurance, repairs, maintenance, vacancy, HOA fees, management costs, and future improvements can all reduce the rental income you actually keep. You also need to prepare for expenses that do not occur every month. Furnaces fail. Appliances need replacement. Plumbing problems happen. Insurance premiums and property taxes can increase. Even a good tenant eventually moves, which can create turnover costs and a period without rental income.
The better question is whether the house still makes sense after realistic expenses are included.
What Happens to Your Insurance When Your Primary Residence Becomes a Rental?
Insurance is an easy detail to overlook when you are focused on everything else involved in a move.
The insurance policy you carried while living in the house may not be the same coverage you need once tenants occupy the property.
Before renting your current home, contact your insurance company and explain that the house will no longer be your personal residence. Ask what type of landlord or rental dwelling coverage you need, how your liability protection may change, whether loss-of-rent coverage makes sense, and whether there are additional requirements if you will be living out of state.
Make sure you understand both the coverage and the cost before including insurance in your financial projections.
Different Chicago Units Require Unique Approaches
Chicago Condos Need Extra Due Diligence
If the home you are leaving is a Chicago condo, the association can play a significant role in whether keeping it as a rental makes sense.
Review the condominium declaration, bylaws, leasing rules, fees, and procedures before assuming you can simply find a tenant and begin collecting rent.
Some buildings have rental restrictions, lease requirements, move-in and move-out procedures, additional fees, parking rules, documentation requirements, or other policies that affect landlords.
The financial picture matters too.
A condo may appear to produce acceptable rent value until you include property taxes, insurance, HOA assessments, maintenance, and the possibility of special assessments.
Competition can also be significant in neighborhoods such as Streeterville, River North, Lakeview, and the West Loop, where individual condo owners may compete with professionally managed apartment buildings.
A Chicago condo can make an excellent rental. It simply needs to be evaluated as an investment rather than as the home you already own.
Chicago Two-Flats and Small Multifamily Homes Require a Different Analysis
A two-flat or small multifamily home can provide more than one source of rental income, but the condition of the entire building matters.
Many of Chicago's two-flats and small multifamily properties are older. Before deciding to keep one as an investment, I would pay close attention to the roof, masonry, plumbing, electrical systems, HVAC equipment, windows, and any deferred maintenance that could create significant expenses over the next several years.
Local rental demand matters too.
A two-flat in Bridgeport, Pilsen, Logan Square, or Avondale should be evaluated based on realistic rents, nearby competition, tenant demand, building condition, and the individual units rather than broad assumptions about Chicago rents.
There is no single "Chicago rental market." Every neighborhood and property type performs differently.
Suburban Single-Family Homes Have Their Own Rental Dynamics
A homeowner relocating from the Chicago suburbs may be evaluating a very different type of investment.
Single-family homes in Naperville, Plainfield, Bolingbrook, Frankfort, New Lenox, Orland Park, and nearby communities can appeal to tenants looking for additional living space, parking, yards, and a longer-term housing option.
These homes also have different operating responsibilities than a city condo.
Landscaping, snow removal, exterior maintenance, larger HVAC systems, roofs, gutters, garages, driveways, and other features can add to the cost of ownership. Rental demand can also vary considerably between suburbs and even between neighborhoods within the same community.
A suburban house should be evaluated based on local rental demand and the actual cost of maintaining that particular home, not by comparing it with a downtown apartment or Chicago condo.
Local Landlord Requirements Matter
Before converting your current home into a rental, make sure you understand the landlord-tenant laws and local requirements that apply to the home.
A rental in the City of Chicago may be subject to different rules and obligations than a house in Naperville, Frankfort, Orland Park, or another suburb.
Those differences can affect leases, required disclosures, deposits, notices, inspections, and other aspects of operating a rental.
This becomes even more important when you move out of state. Living somewhere else does not remove your responsibilities as an Illinois property owner.
You need a plan for staying compliant with the requirements where the home is actually located.
Can You Manage Your Home From Another City or State?
You can own property in one state and live in another. The bigger question is whether you want to manage the house remotely.
Once you move, tenants will still need support. Repairs will still happen. Leases will expire. Rent needs to be collected, contractors may need access, and eventually the home may need to be prepared and marketed for a new tenant.
Long-distance ownership can become complicated if you do not have reliable systems and local support.
This is especially relevant for doctors, physicians, executives, business owners, and other professionals with demanding schedules.
A physician relocating for fellowship may not be available to coordinate a maintenance issue during a hospital shift. Someone starting a new job in another state may not want to spend evenings responding to tenant issues or finding a contractor hundreds of miles away
Some homeowners enjoy self-management and want direct involvement. Others prefer to make the larger financial decisions while a property manager handles leasing, tenant communication, maintenance coordination, rent collection, and other daily responsibilities.
Professional property management has a cost, but your time has value too. Both belong in the calculation.
What Would Selling Allow You to Do With the Equity?
Keeping your previous home means keeping a significant amount of capital tied up in the property.
Selling may provide sale proceeds that could be used toward your next home, another investment, debt reduction, emergency reserves, retirement savings, or a different investment property with stronger financial potential.
This is why I like asking homeowners a slightly different version of the question from the beginning:
If you had the equivalent amount of equity sitting in cash today, would you choose to invest that money in this exact house?
If you would, keeping it deserves serious consideration.
If you would not, understand why before becoming a landlord simply because you already own the home.
Consider Capital Gains and Tax Consequences Before You Decide
Converting a primary residence into a rental can affect the tax picture when you eventually sell.
Under current federal rules, homeowners who meet certain ownership and use requirements may qualify to exclude up to $250,000 of gain from the sale of a personal residence, or up to $500,000 for many married couples filing jointly.
Turning the home into a rental does not necessarily mean that benefit immediately disappears. However, rental use, depreciation, the timing of a future sale, and your individual circumstances can affect how the rules apply.
This is not an area where I would rely on a simple internet rule.
Talk with a qualified CPA or tax professional before converting your personal residence into a rental, particularly if you expect to keep the home for a few years before selling.
A property manager can help you understand market rent, overhead, tenant demand, maintenance, and the practical side of becoming a landlord. Your CPA should help you understand capital gains taxes and other tax considerations specific to your situation.
When Does Renting or Selling Make More Sense?
Keeping your home may make sense when rental demand is strong, expected rent supports realistic expenses, you have adequate reserves for repairs and vacancy, and you are comfortable owning the house for several more years. You should also have a clear management plan, especially if you plan to move out of state.
Selling may make more sense when rental income does not adequately support ongoing costs, major repairs are approaching, HOA restrictions hurt the investment, or you have a better use for the equity. It may also simply be the better choice if you do not want the responsibilities associated with owning a rental in another city.
One of the most useful questions is whether you would be comfortable owning the home for another five or ten years.
If the investment only works when everything goes perfectly for the next twelve months, I would take another look at the numbers.
Before You Decide, Ask These 10 Questions
Before you sell or rent your current home, ask:
What could the house realistically rent for today?
What will it cost to own after all rental expenditures are included?
How much would I receive in estimated net sale proceeds?
Are major repairs or capital improvements approaching?
Are there HOA or rental restrictions?
How strong is tenant demand for this specific home and location?
Who will manage the house if I move out of state?
How many years am I comfortable keeping it?
Have I discussed capital gains and other tax considerations with my CPA?
If I did not already own the house, would I buy it today as a rental property?
You do not need to predict exactly what will happen over the next decade. You need enough information to compare your options based on realistic expectations rather than emotion.
So, Should You Sell or Rent Your Home When Relocating?
There is no universal answer.
Selling may provide immediate cash, simplify your move, and remove the responsibility of owning a home in another city.
Renting may allow you to maintain ownership, generate rental income, and continue building equity.
The right decision depends on your financial goals, local market conditions, expected rent, operating costs, available equity, tax considerations, and how much involvement you want after you relocate.
Do not rent your old home simply because you can find a tenant.
Keep it because the numbers make sense, the market supports the decision, and you would still choose to own the house as an investment.
Relocating? Find Out What Your Chicago-Area Home Could Rent For Before You Sell
If you are moving out of Chicago or the surrounding suburbs, you do not have to guess whether keeping your current house as a rental makes sense.
Landmark Property Management can provide a rental analysis based on comparable rentals, local tenant demand, the condition of your home, and current market conditions. We can also help you understand what day-to-day ownership may look like if you move to a new city or state.
Whether you are a physician relocating for fellowship, a professional starting a new job, or a homeowner moving for family or lifestyle reasons, accurate information can make the sell-or-rent decision much easier.
With more than a decade of experience managing thousands of residential and commercial rentals throughout Chicagoland, our goal is not to convince every homeowner to become a landlord. We want to give you practical information so you can decide whether keeping your house actually makes sense.
Doctors and physicians planning to keep a Chicago-area home can also learn more about our Property Management for Doctors & Physicians services.
Frequently Asked Questions About Selling or Renting Your Home When Relocating
Can I Turn My Primary Residence Into a Rental Property?
Yes, in many cases you can turn your home into a rental property after moving. Before doing so, review your mortgage requirements, insurance coverage, condo or HOA rules, and local landlord requirements. You should also determine realistic monthly rent and calculate expected expenses, including maintenance, vacancy, taxes, insurance, and property management, before deciding whether the home makes sense as a rental.
Is It Better to Sell or Rent Your House When You Move Out of State?
Renting may make sense if your home has strong rental demand, expected rental income supports the ongoing expenses, and you want to own the property long term. Selling may be the better choice if you need the sale proceeds, the home would produce weak cash flow, significant repairs are approaching, or you do not want to manage a property from another state.
The best decision depends on the home's rental potential, your equity, local market conditions, expected costs, and your long-term financial goals. We’ll be the first to tell you if we believe your specific property does or does not make sense as a rental, so feel free to use Landmark as a resource.
Can I Own a Rental Property in Illinois if I Live in Another State?
Yes, you can own an Illinois rental property while living in a different state. However, you are still responsible for many of the most important tasks including maintaining the property, responding to tenant issues, managing leases and rent collection, and complying with the landlord-tenant requirements that apply where the property is located.
For homeowners moving out of state, working with a local property manager can provide someone nearby to handle leasing, maintenance, tenant communication, and other day-to-day responsibilities.
How Do I Know How Much My Chicago-Area Home Could Rent For?
The best way to estimate market rent is to compare your home with similar rentals in the same area, considering property type, size, condition, bedroom count, parking, amenities, and location.
Rental values can vary significantly between Chicago neighborhoods and suburbs such as Naperville, Plainfield, Frankfort, and Orland Park. A professional rental analysis can provide a more property-specific estimate than relying solely on a broad online rent estimate.
Should Doctors and Physicians Keep Their Former Home as a Rental?
A doctor or physician may benefit from keeping a former home as a rental if the property has strong tenant demand, realistic rental income supports the money spent, and keeping the home fits their long-term financial goals. There may also be tax considerations associated with converting a primary residence into a rental, which should be discussed with a qualified CPA or tax professional.
Physicians relocating for residency, fellowship, an attending position, or another medical career opportunity should also consider how the property will be managed after they move. Because medical schedules can make self-management difficult, the time required to handle renters, maintenance, leasing, and emergencies should be part of the decision.
View our complete guide for doctors and physicians looking to invest in real estate!
Do I Need a Property Manager if I Move Out of State?
You are not automatically required to hire a property manager simply because you relocate, but managing a rental property from another city or state can be challenging. A local property manager can handle tenant communication, rent collection, leasing, maintenance coordination, inspections, and other responsibilities that are difficult to manage remotely.
Whether professional management makes sense depends on your location, schedule, experience as a landlord, and how involved you want to be in the property's daily operation.
What Expenses Should I Consider Before Renting Out My Home?
Before renting out your home, consider the mortgage, taxes, landlord insurance, maintenance, repairs, vacancy, turnover costs, HOA assessments when applicable, capital improvements, leasing costs, and property management.
Do not assume that the difference between your mortgage payment and monthly rent is your profit. Your actual cash flow depends on the property's total income and costs over time.
Will Turning My Primary Residence Into a Rental Affect Capital Gains Taxes?
It can. Converting a primary residence into a rental may affect the tax treatment of a future sale, particularly because rental use can introduce depreciation and other tax considerations.
Federal rules may allow qualifying homeowners to exclude some gain from the sale of a residence when ownership and use requirements are met, but individual circumstances vary. Speak with a qualified CPA or tax professional before converting your home into a rental if potential capital gains taxes are an important part of your decision.
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