Rent or Sell Your House: How Washington Owners Compare the Options

CompareFacts checked November 8, 2026Reviewed by Gary E. Wilson, President and Designated Broker

Start with what you want from the house

Most owners face this choice after a move: a new job, a growing family, a parent's house that is now yours, or a home you simply outgrew. Before you look at numbers, write down what you want the house to do for you over the next five years.

Some owners want monthly income and a long-term hold. Some want cash now for a new home. Some plan to move back one day. Each goal points a different way, and a clear goal makes the rest of this comparison much easier.

Be honest about how you feel about being a landlord. A rental is a small business with legal duties, and it runs whether or not you are in the mood that week.

The federal tax clock on a former home

If the house was your main home, the IRS may let you exclude up to $250,000 of gain when you sell, or up to $500,000 for a married couple filing jointly who meet the rules. To qualify, you generally must have owned the home and lived in it for at least 24 months of the 5 years before the sale (IRS Publication 523). The 24 months do not have to be in one block.

Renting the house after you move out does not end that break by itself. Under 26 U.S.C. 121, time after the last date you used the home as your main home, inside that 5-year window, is not counted against you as nonqualified use. But the window keeps moving. If you rent long enough, you will no longer have 24 months of living there inside the last 5 years, and the full exclusion is usually gone.

Depreciation is the other piece. Once the house is a rental, you can claim depreciation, and the depreciation basis is generally the lower of what you paid (adjusted) or the market value when you converted it (IRS Publication 527). When you sell, the part of your gain equal to depreciation allowed or allowable after May 6, 1997, cannot be excluded, even if the rest of the gain is. IRS Publication 544 explains how that gain, called unrecaptured section 1250 gain, is handled. Our post on rental property tax benefits covers the deductions side. A CPA can run your actual dates and numbers.

Write down three dates now: the day you moved out, the day the house was ready and available for rent, and the day the first tenant moved in. Publication 527 says depreciation can begin when the house is ready and available for rent, and the Publication 523 worksheets depend on your move-out date.

What renting it out commits you to in Washington

Washington's Residential Landlord-Tenant Act (RCW 59.18) applies to a single house the same way it applies to a large building. These are the duties that most often surprise new landlords:

• To collect a deposit, you need a written lease and a signed move-in checklist describing the home's condition (RCW 59.18.260).
• Deposits go into a trust account at a Washington financial institution or licensed escrow, and the tenant gets written notice of where it is held (RCW 59.18.270).
• At move-out, you have 30 days to send a full written statement of any deductions with the refund (RCW 59.18.280).
• You cannot end most tenancies without one of the causes listed in RCW 59.18.650, each with its own notice period.
• Rent increases need at least 90 days' written notice (RCW 59.18.140), and the statewide cap in RCW 59.18.700 limits how much rent can go up each year.
• Repairs, insurance, records and taxes continue every month, including the months the house sits empty.

Check insurance and loan terms before you lease

Call your insurer before the first showing and ask whether your current policy covers a home rented to someone else. Read your mortgage paperwork for any occupancy terms as well. These are quick checks, and they are much easier before a tenant moves in than after a claim.

If you hire a manager, expect the same question. Wilson Management's Owner FAQ says it needs to see proof of the owner's insurance before management starts, and that its renters must carry renters insurance to cover their own belongings.

If you rent now and sell later

Many owners plan to rent for a few years, then sell. That can work, but plan the exit on day one. Washington lets an owner end a tenancy to sell a single-family home only with at least 90 days' written notice, and the owner must make reasonable attempts to sell, such as listing it at a reasonable price, within 30 days after the tenant leaves (RCW 59.18.650).

That reason cannot cut a fixed-term lease short unless you and the tenant agree in writing and the tenant gets at least 60 days to move. So a lease that ends at the wrong season can push your sale date back.

You can also sell with the tenant in place. If the buyer takes over as landlord, the deposit moves to the new owner's trust account and the tenant must be told where it is (RCW 59.18.270). Our guide to selling a tenant-occupied rental walks through showings, notices and the buyer hand-off.

Your time, and who carries the work

The last question is who does the work. Self-managing means you handle showings, screening, repairs, notices and the move-out statement yourself. A licensed manager takes on that work under a written agreement, and you keep the big decisions. If you are new to this, the first-time landlord guide and our page on how to rent out your Bellevue house show the steps.

Before you decide, it helps to know what the house would likely rent for. Wilson Management's free rental analysis lets you speak with one of its property managers about the rent you could charge. Its fees page says fees are explained up front during that analysis. Our guide on what a rental analysis tells you explains how to read one, and what it cannot tell you.