A home owner who has to move to a place other than the one he/she is living in has to face a specific dilemma along with the different hassles of relocating. This relates to choosing between selling the home he/she was residing in or giving it out on rent. It is quite a crucial decision that carries significant implications for the future, and therefore, needs to be taken after due deliberation.
Let us discuss the key things that you must consider should you ever find yourself in such a predicament.
- The amount of rent you can expect – Compare the amount of rent your home can generate with the mortgage installments that might be outstanding against it. If the rent covers the EMI and you don’t have any other urgent financial need, renting might be a good idea.
- Is the property in need of upgrading – You might have lived happily in your home even with its few shortcomings, but a buyer or tenant will not be that willing to compromise. Estimate how much upgrading the property needs to generate the rent or sale price you desire. Calculate the return you can expect on this additional investment and make the rent or sell decision accordingly.
- Your inclination towards being a landlord – Being a landlord comes with several responsibilities. If you want to have good relationship with your tenants and enjoy long-term and hassle-free tenancy of your home, you should be ready to listen patiently to your tenants’ concerns and needs and be prompt in solving them. Reflect on whether you have the temperament to be a responsible landlord.
- The housing plan you have for the new place – You must consider where you would be staying in the new place. Renting the old place is advisable only if you earn a decent enough rent from it and can easily afford the rent to be paid in the new place.
- The prevailing market conditions – If the current realty market conditions indicate that your home won’t get the price you desire for it, there is no need to rush into selling it. You can easily rent it out until the conditions change in your favor.
- Your plans for moving back – If you expect to be away from your home only for some years and have every possibility of returning, it would be wiser to rent out the property. However, if you feel that your relocation is permanent, it would make better sense to sell off your home and buy a new one in the new place.
Your home is a sizable investment or asset and any decision you take regarding it is bound to have major repercussions on your life. Make sure that you think things through and consult a few people whose judgment you trust before deciding anything.