One of the biggest mistakes I see homeowners make—especially here in Amarillo—is turning their personal home into a rental. On paper, it might seem like a smart move. You’re relocating for work or a change of scenery, and rather than sell, you figure you’ll turn your personal home into a rental and start building some passive income. Sounds great, right?
Unfortunately, this decision often ends in regret—and not just a little regret, but the kind that keeps you up at night. I get calls all the time from people who say, “I wish I had just sold my house when I moved.”
Here’s the scenario I’ve seen play out over and over again:
A family has a beautiful, well-kept home. It’s their pride and joy. Maybe they’ve raised kids there, hosted holidays, and poured time and money into making it just right. But now they’re moving out of town, and instead of selling, they decide to turn their personal home into a rental. A year or two goes by, and that once-pristine house looks like it’s been through a war zone.
The tenants have moved out—sometimes in the middle of the night, sometimes without warning—and left behind a mess. Broken windows. Holes in the walls. Carpet stains that defy logic. The repair costs are staggering. But the emotional cost? That’s even worse. This wasn’t just any house. This was your home.
But it doesn’t stop there. Here’s the kicker: now the home is no longer considered your homestead, and that has serious tax implications. When you eventually sell the house, you may have to pay capital gains taxes on the profit. Had you sold it while it was still your primary residence, you could have likely walked away with that money tax-free.
Let’s not forget one more harsh reality—market value. If the house suffered from tenant wear-and-tear, it may no longer be worth what it was when you moved out. And in today’s ever-changing Amarillo real estate market, timing can be everything.
There’s a Better Way
If you’re moving out of town or upgrading to a new house, it’s almost always better to sell your current home while it’s still in excellent conditiond. This is when you’re most likely to get top dollar—especially if your house is valued at or above the average home price for Amarillo.
In fact, many Amarillo rent houses that deliver the best return on investment tend to be homes that are slightly below the average home value. These houses are easier to cash flow and often attract more consistent long-term tenants. That’s what makes them great rentals. Your personal residence—especially if it’s in a desirable neighborhood with high-end finishes—is probably not that kind of property.
So, what should you do instead?
Sell your house in Amarillo while it’s in great shape. Take advantage of the capital gains tax exclusion (up to $250,000 for individuals, $500,000 for married couples). Then, take that money and go buy a property that’s built to be a rental.
This way, you’re separating emotion from investment, maximizing your profit, and setting yourself up for long-term success in the Amarillo real estate market. Selling before converting your personal home into a rental allows you to protect its value, avoid tax complications, and walk away with peace of mind.
When Keeping Your House as a Rental Might Make Sense
Now, like any good rule, there are exceptions.
If you’ve got an old mortgage with a super low interest rate, little equity, and enough income or savings to buy your next house without having to sell your current one—then keeping your house as a rental might make sense. That kind of financing situation is hard to replicate today, especially with current mortgage rates on the rise.
Another scenario: if you don’t think you’ll actually follow through on a plan to buy other rental properties later, then it might be better to hold on to the one you already have. It’s better to have one rental than none at all. However, if you’re confident you’ll go through with buying a new investment property—or if you already own other rentals—then selling your personal house while it’s still in top condition and worth the most money is often the smarter move.
But even then, you’ve got to be honest with yourself. Do you have the discipline to treat it like a true investment? Are you ready to deal with tenant issues, maintenance requests, property management (or the cost of hiring one), and the occasional 2 a.m. water heater emergency?
If not, selling is probably the simpler, smarter route.
Amarillo Real Estate: A Market That Rewards Smart Moves
We’ve been helping folks buy and sell houses in Amarillo for over 25 years, and we’ve seen just about every situation imaginable. The truth is, Amarillo real estate can be a fantastic investment—if you go into it with the right strategy.
Renting out your former home might feel like a “safe” or “temporary” decision, but it often turns into a long-term headache. Meanwhile, buyers in Amarillo are always looking for clean, move-in-ready homes—and if you’ve taken good care of yours, now is the time to cash in.
At Mitchell Property Group, we specialize in helping people sell houses in Amarillo fast, without the stress of listing, showings, or waiting for financing. We buy houses as-is, and we can help you avoid costly repairs, drawn-out closings, and the gamble of becoming an accidental landlord.
Final Thoughts
Don’t let short-term thinking cost you long-term peace of mind. Before you decide to turn your personal home into a rental, think through all the angles—financial, emotional, and logistical. And if you’re ready to sell your house in Amarillo and move forward with confidence, give us a call. Even if you disagree and want to have a friendly debate, call us! We’re here to help. We can give you tips you probably haven’t considered before.