Sell or Rent – What Should I Do With My Property?
It can be incredibly difficult to decide what to do with a property, especially if you’ve recently inherited it and aren’t sure what your options are. We’ve had a lot of questions about the pros and cons of selling or renting a house, so we’ve put together the key things that you should consider if you’ve been wondering about it too!
What are the pros of selling?
If you’re looking to sell the house, there are some benefits, such as –
- Giving you a clean break from the house, breaking any ties or responsibilities that you would have as a homeowner
- If the mortgage isn’t high or has been paid off in full, you’ll be able to take the profits to use as you want
- Especially in the case of inherited properties, it can be much easier to sell and split the proceeds between other inheritors
- If the house isn’t suitable for you to live in, you can use the proceeds to buy something that is
- You don’t need to maintain the house with someone else living in it.
These can be incredibly appealing to some homeowners, but there are drawbacks to selling that should also be considered before you make your decision.
What are the cons of selling?
- One of the biggest cons is the risk of losing out financially. Property value will often increase over time and become a more valuable asset
- Selling is stressful and emotional at the best of times, and if you have a connection to the house it can be even more difficult
- Selling will mean you miss out on the opportunity of a long-term financial income that can be a large contributing factor to an early or a more comfortable retirement
- Depending on the condition of the property, you may need to put work into it before it’s ready to sell. There are also hidden costs in selling which you will need to pay for, alongside the maintenance of the house while it’s on the market. With the average house sale taking over 6 months, these costs quickly add up, which can add extra stress to anyone asking themselves “can I sell my house fast?”.
A lot of the time, homeowners don’t consider the alternative option, which is renting the property out and becoming a landlord. This is a big decision and not always the right one for some homeowners, but for those who do take the leap it can be an incredible opportunity.
What are the pros of renting the property out?
- Choosing to rent out a property provides you with a secure income and can give you extra financial stability along with any other income that you have, which is often the main reason why landlords are able to retire at an earlier age
- You’ll qualify for several tax deductions, giving you tax relief on travelling to and from the property, for any repairs or maintenance that needs carrying out, and depreciation
- The income is easy to split between any other people involved
- You’ll be able to advertise for tenants much faster than you would achieve a sale, potentially resulting in much quicker returns.
- Depending on the climate and the housing market when you’re looking to sell, you might want to delay the sale to get a better price down the line. You can rent the property during this time, generating an income which may ultimately work out to be more beneficial for you than selling.
Renting out a property does also have some negatives which you need to take into consideration when looking into something like this.
What are the cons of renting out a house?
- Depending on the property, you’ll likely need to make some changes for it to be suitable to rent, especially if you want to make it a HMO which will need to meet several regulations before you can move forwards
- You might need to get an agent to manage the property for you which will cost you money, but ultimately make your life easier, especially if you don’t live near the house or just don’t have the time to dedicate to it
- You’ll need to pay tax on the profits from the rental income
- If your tenants cause any damage, it will be your responsibility to deal with it. You will also run into issues if the tenants refuse to pay rent and you have to apply for a repossession order to get them out of the property which can take months to resolve.
Are there other responsibilities I would need to know about?
As a landlord, there are several responsibilities that you need to abide by, such as –
- Liability for any repairs internally and externally
- The property needs to be gas-safe, and this will need to be checked regularly
- If you have any furnishings inside, they need to be fire-safe
- You will need to make sure that the property is fit to live in, and not in a bad condition.
There are also laws that you need to adhere to as a landlord –
- Before you visit the property, you need to give tenants at least 24 hours’ notice
- You will need to provide an accurate EPC and have this updated when it expires
- Your tenants deposit needs to be protected in a government-approved scheme
When making a decision like this, you need to make sure that you do your research and are comfortable with the choice that you finalise. There are lots of pros and cons to selling or renting, so take into consideration the above while you’re making your decision.
This guest post was provided by Holly Herbert from We Buy Any House. The opinions expressed by the guest writer above and those providing comments are theirs alone, and do not necessarily reflect the opinions of SevenCapital or any employee thereof. SevenCapital is not responsible for the accuracy of any of the information supplied by the guest writer.