Should you sell your home or rent it out?

There may come a time that you need to move for whatever reason and are unable to either get your house sold fast enough or achieve the price that you are looking for. It could be that you have found your dream home for a great price and want to move as soon as possible, or, you may need to move urgently for work or family reasons.

 

Another reason could be that you need to sell, but are unable to secure the right price for your property, and may want to consider renting it out until the market turns. In some instances, this decision turned out so well, that the property owners ended up retaining the property long-term as a rental investment.

 

Before you take that step though, consider this:

 

Financial security – if you have a bond on your house and the rental income is insufficient to cover it, you need to be sure that you are financially able to fund this shortfall. Consider too what happens if you find yourself in a situation where the tenant defaults or your property stands vacant for a period of time. Will you be able to absorb this financially? There may also be tax implications for your rental income.

 

Holding costs – in addition to any potential bond repayments, there will ongoing costs associated with the rental property. This will for example include property taxes as well as maintenance and possibly also security costs. Rental property requires a lot of time and is a hands-on investment if your property is going to maintain and appreciate in value.

 

Rental demand – the next important consideration is whether there is sufficient rental demand in the area and that you are not just taking a massive risk by thinking you will get a tenant at a particular rental, when the market reality is quite different. Always do your homework to minimise the risk of ending up with a financial burden.

 

Long-term view – if you are only moving for a period of time such as for a work contract, then it might be a good option to rent your home out so that it is available when you want to move back. This is workable solution if you are going to rent elsewhere without the additional burden of owning a second property. If the move becomes more permanent, then you can always re-evaluate your situation and put the property up for sale.

 

Work with a credible rental agent – if you are not in the business of rentals, then it is always advisable that you work with a credible rental agent who is experienced in the local market. Such an agent will be a valuable resource and help mitigate the risk as they will assist in sourcing and vetting the best candidate for your property, manage your rental collections and ensure that you have the right knowledge about whether you should in fact take the rental option.

 

Property is generally regarded as an outstanding investment, but it is always best to take the guess work out of the equation. Do thorough research as not all areas experience the same demand for rental property and not all properties are ideal for rental purposes.