When moving house there are many different personal situations and financial considerations to take into account. In some circumstances renting out a previous home instead of selling it can be beneficial and, not to mention, a profitable investment. There are many situations where holding on to a previous home and renting it out makes sense, so House Network has put together this guide to help you decide, should I sell or rent out my house?
1) Consider your personal circumstances
There are a number of different reasons you could be moving and if you’re not certain that your move is going to be a permanent fixture then holding on to your old home and renting it out is a good idea. Circumstances where renting out your old home is a good idea include:
- if you’re moving for a new job which could be temporary
- if you’re moving so that your child can get into a better school catchment area
- if you’re moving in with a partner for the first time
All these circumstances could very easily change and having the option to go back to your old home can be really beneficial if you do have a change of heart. A lot of couples rent out one their houses when they’re cohabiting for the first time as selling your own house can feel quite daunting, in case your new venture doesn’t work out.
2) Assess your financial situation
A lot of people don’t have the luxury of being able to think about keeping hold of their old home as they need the money from the sale to go towards their new home. If you’re thinking ‘should I sell or rent my house?’ then you need to work out if you’re in a financial position to buy another house without the money from your current property. Keeping on a second house can be beneficial as an asset with regular income from tenants but you need to calculate whether over a certain period of time it will prove to be as profitable as selling your home outright .
3) Could your old home be an investment?
For those who can afford to rent their house out as an investment rather than sell it outright, this might work out better to keep it as an asset in the long run. If your home is in a desirable area or has a lot of positives which would make it a desirable rental property, it’s worth looking into whether you can afford to rent it out. This is particularly important if you own a house in London, where house prices increase rapidly over the years. Even if it may seem like you’re losing out for a few years, in five years’ time your property could have almost doubled in value.
4) Do you have the time to be a landlord?
Unless you get an estate agent to manage the letting of your property for you, you’re going to have to spend a lot of time preparing your property for tenants and maintaining it whilst they live there. Depending on the type of tenants you have this can be time consuming. Weigh up whether the amount of time you’d have to spend on the house is worth the money you’ll make from keeping it as an investment.
Should I sell or rent out my house? is a question that only you can answer but, by following this advice, coming to a decision should be much easier.
Image courtesy of iStock.