Should I sell my house or rent it out? McGrath Real Estate Group tips. Image: 20120106-OC-AMW-0031 by U.S. Department of Agriculture via FlickrFor personal, financial or other reasons, at some time in your life you may face the perplexing decision of asking yourself should I sell my house or rent it out?

Life changes; the state of the economy and, by extension, the real estate market; revised taxation legislation; and changes to your neighbourhood are all examples of factors that can affect your plans with respect your property holdings.

Reflecting changes in Australian society, the property market today operates less rigidly than it did a generation or two ago, with entrepreneurial property owners developing strategies to maximise their returns on investment and minimise their tax obligations.

For example, some property owners find it advantageous to rent the homes they live in.

The circumstances that have caused you to consider selling your house or renting it out make a difference as to which choice is best for you.

Why are you leaving your home and do you plan to return?

If you are buying another home and are in a financial position to do so, you could restructure your borrowings and retain your existing home as an investment property.

To do this you will need to detach emotionally from your old home as, if only from fair wear and tear, its condition will deteriorate over time.

Unlike when you sell a house, as the landlord you will witness this deterioration—consider how that might make you feel.

If you are travelling or moving overseas or interstate and not planning to live in your home again, you have a number of options, including:

  • sell your house
  • rent out your house
  • sell your house and buy a cheaper investment property to rent out.

If you are going overseas or interstate for work but planning to return to your home, these are some of your options:

  • rent out your house
  • leave your house empty (not recommended for long absences)
  • have friends or relatives act as caretakers and stay in your house rent free.

Depending on how well you know your caretakers, the last option involves a degree of risk, which can be mitigated by obtaining legal advice and having an agreement drawn up to protect your asset.

Can you live with renting out your home?

For the homeowner who is emotionally attached to their house and plans to return to live in it, my recommendation is not to rent it out.

If it would break your heart to return to find that your home has suffered not only fair wear and tear, but also neglect or even malicious damage, just don’t put yourself in the situation whereby that might occur.

While tenants will never look after a house as well as an owner-occupier, engaging a professional property manager to undertake regular inspections (among other services) can go a long way towards closing the gap.

Should I sell my house or rent it out? What do the numbers say?

So, should I sell my house or rent it out?

Well, as part of your decision-making about whether to sell or rent out your house, seek advice from an experienced local real estate agent as to:

  • its current value
  • whether it is likely to appreciate in value by the time you return
  • what the market rate would be to rent it out.

As always, I urge you to consult a qualified financial adviser before making this or any other major financial decision.

They can advise you on the financial and taxation ramifications of the course of action you propose and may well suggest more financially beneficial alternatives.

For expert advice on all your options

For a valuation of your home and a personalised analysis of the pros and cons of selling it or renting it out, talk to the local experts at McGrath Real Estate.

In addition to our experienced real estate agents, we have a great team of property managers, all of them with an intimate knowledge of Adelaide’s western and coastal suburbs property market.

 

Image: 20120106-OC-AMW-0031 by U.S. Department of Agriculture via Flickr. CC BY 2.0