Ultimate Property Dilemma: To Sell or Rent? Discover the Pros and Cons!
There may come a time in your life when you have to or choose to relocate, whether it is for professional or personal reasons, and you will be faced with the decision of what to do with your family home. Whatever the reason may be, you will be left with a tough choice of whether to sell or rent it out, which carries some significant financial and emotional implications. However, since everyone’s circumstances are different, there is no one-size-fits-all answer to this question. Here are five key considerations to help you make the best decision:
1. Is being a landlord for you?
Renting out your property is essentially turning it into a business and you have responsibilities as the business owner to make sure it is adequately resourced, funded and fit for purpose. You have to be prepared to take on or manage all relevant aspects of being a landlord. You must ensure you have the right people in place eg. rental agents, legal advisor etc. and be prepared to discharge your legal and commercial responsibilities.
2. Is the property suitable for renting?
It must be habitable, safe and free of any defects that may adversely affect the enjoyment and use of the property by your tenants. You may need to do some repairs and maintenance work on your property to bring it up to marketable standards, not to mention to meet your legal responsibilities. This will cost money, so you will need to decide on whether it’s best to invest and rent or sell based on affordability and commercial considerations.
3. Trust your gut
Reflect on what feels right as well as what makes financial sense. If you can get to a position where you’re on the same page emotionally and financially, you’re well your way to choosing the best option for you and your family.
4. Is there rental demand for your property?
Before putting your home on the rental market, you need to do some research and find out what the rental demand is in your area and see what the average rent level is. If rental demand is low or vacancy rates are high in your area, that is not good from a financial perspective. You don’t want your property sitting vacant for extended periods of time.
5. Which option makes the most sense financially?
Start by preparing a detailed budget , covering the period you will be away. Your budget should account for all income and expenses associated with renting out your home, together with the costs associated to renting or buying your new home. Once this is done, prepare a similar budget that assumes your property was sold. This will quickly show you which option is the more financially feasible one for your circumstance, which will reveal the best course of action.
In conclusion, the decision to sell or rent out your property is not an easy one, and it requires careful consideration of various factors. As highlighted in this article, being a landlord requires a significant commitment of time, money and resources, and it’s important to ensure that your property is suitable for renting, and that there is rental demand in your area. It’s also important to trust your gut and make a decision that feels right emotionally and financially. By preparing detailed budgets and comparing the financial implications of both options, you can make an informed decision that is best for you and your family.