Should you sell your home or rent it out?
RE/MAX relays to Angelique Ruzicka about the pros and cons of selling or renting out your property if you’re not sure what to do with it.
You may not want to sell your home. Perhaps you’re moving to another country and aren’t sure whether you want to call it home. So you want to keep your property but can’t afford to pay the instalments while you travel. Well, you have two options: you can either rent or sell.
Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, provides a few important considerations for homeowners who can’t decide what to do:
How permanent is the move?
Is the move for good or is it just for a time? “If you are packing up and going for good, then it makes sense to sell the property. However, if there is a chance you will be returning in a year or two, the time and money spent on selling the home and purchasing another won’t be worth your while. In that case, renting out the property seems like a far more feasible option,” says Goslett.
Conditions surrounding the market
Do some research into what the rental prices are in your area, as well as the current selling prices of the homes. Also look at the demand for rental properties and the number of current listings available. Would it be more profitable to rent or is it best to sell? Once you make those calculations you should reach the right decision.
Where is the area headed?
Aside from where the property is located, another influential factor when it comes to a property’s potential is the future development plans for the neighbourhood as well as the condition on the neighbourhood. “Future development planned in and around the area can have a positive or negative impact on home values, depending on what the development is. For example, Gautrain stations in Sandton, Rosebank and Pretoria have pushed property prices up in the surrounding neighbourhoods. However, industrial type development in some suburbs has negatively influenced the value of homes in the immediate area,” says Goslett.
Who will manage the property?
If you’re renting, consider who’s going to collect the rent and manage the property when you’re not around? There’s always a chance that disaster could strike. A geyser could burst or the electrics could cease. You need someone on hand to manage things if they go wrong.
Finally, what are the tax implications?
Each situation is unique, so before you decide to rent out your home consider talking with a tax professional. They can help you figure out how much you can expect to pay in taxes on the rental income.
“Deciding to hold onto the property and rent it out or sell it, will depend on your circumstances and what will fit your needs and situation. Only you will be able to tell what option makes the most sense and will work for you,” Goslett concludes.