The Big Debate: Should You Rent or Sell Your Property?
To rent or to sell your property, that is the question! There are a number of issues that you should take on board when making such a decision. This will vary greatly depending on individual circumstances. With this article, I hope to highlight some simple points that are worth considering when renting your property.
Perks of renting your property
If you are away from your property temporarily, because of work for instance, renting your home allows you the option of moving back into it if you are fond of it, or if you feel that the housing prices might rise within that area. By renting your home, this allows for a monthly income that can go towards the mortgage of the property and in this way the tenant is essentially paying for you to earn equity. When the mortgage is clear, the monthly rent can serve as income. Be sure to check firstly with your mortgage company to see whether this is allowed as some companies have clauses with different terms
Risks of renting your property
Having a reliable monthly income sounds very inviting, but renting your property does come with additional costs and risks. Here are a couple points that are worth thinking about as a landlord:
- Mortgage payment. Consider the amount of interest on the payments.
- Property tax. Usually this is around 2 per cent of the value of the home, but depends on the area.
- Landlord insurance. This covers you if there is damage or if someone is injured on your property. More can be found here.
- Repairs & replacements. When something is broken or damaged, you will be expected to fix it. (windows, doors, carpets, main appliances, etc)
- Maintenance. After a tenant leaves the property you will
be expected to clean it and ensure it is of a rentable standard.
- Advertisement. You will be expected to advertise and show the property to potential tenants and make up a tenancy agreement.
Make a sound decision
Being a landlord can be time-consuming and require effort and there are some risks involving the uncertainty of potential tenants, such as whether they pay accordingly and treat the property with care. There are websites that enable background checks that look into someones rental history and their reliability as a renter here. It is worth also looking over this guide for tenants and landlords to understand your rights and responsibilities when renting your property.
A simple calculator below allows you to see how much you can expect to earn on your buy-to-let investment. Be sure to take into account mortgage payments if they apply. If you’re not satisfied with your current home value, renting out the property can provide some income while you wait for the value to rise in order to sell your property at the right time. It is good to keep an eye on the state of the housing market so that you can make the most of your property, whether that is to rent or sell.