Rent-out or sell-up? Which makes more financial sense?

If you’re fortunate enough to be in a financial situation where you don’t need to sell the home you’re in to afford your next one, you might consider the possibility of renting out your current abode when you move out.

This situation can occur when you move interstate or overseas for work; you’ve planned an extended holiday; or are moving to another town to care for a family member. In these situations you may be considering to return to the area at a later date. Or you may have just found your dream house somewhere else and it’s time to move on. Whatever the situation, if you don’t have to sell, should you? Or would the financial rewards be greater in the rental market?

Some things to consider:

What’s the demand for rentals in your area?

Have a look at rental prices in your area and talk to a reputable agency about how many similar homes are competing for tenants in your area. Then do your sums. If rents are low and vacancies high it may pay to sell up and invest that money in another market or opportunity. However if rents are high and vacancies low, it would make sense to rent your property out and reap the rewards.

Getting your property rent-ready – are you prepared for the expense?

Leaky taps, loose tiles, broken ceiling fans, stained carpets and a myriad of other jobs will need your attention before your property is rent-ready. On top of this you’ll have the expense of management fees, insurance, on-going maintenance costs and accountant fees. Are you prepared to stump up for these extra expenses?

What’s the projected growth?

If your area is at the top of the property market it makes sense to sell while the going is good, however if your area is on the downward cycle but expected to grow in coming years it might pay to hang on and reap the financial benefits in the future.

Are you prepared to be a Landlord?

As a Landlord you’ll have to respond to emails and phone calls regularly, track expenses and make decisions on repairs,  maintenance and problem tenants. You’ll also have extra work at the end of the financial year. Ask yourself, how much do you love paperwork? A good property manager however can help you with a lot of the heavy lifting in this area, so it pays to do your research and find a good one.

What’s your tax situation?

You’ll need to develop a good understanding of the capital tax implications and tax liability that may result from either renting or selling your home. Every situation is different so talk to your accountant about this one.


The information in this article is provided as general interest and is not intended as financial advice in any way. Any general tax information provided in this article is intended as a guide only. Financial and taxation advice on any of the topics outlined in this article should be sought from a qualified, experienced and reputable financial advisor or tax agent who will be able to conduct a proper risk assessment for your individual situation. This article is not intended to be a substitute for specialised taxation advice or an assessment of an individual’s liabilities, obligations or claim entitlements under Australian taxation law


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