Any new item feels new only until you’ve become comfortable with it. Let’s take the example of iPhones – people are comfortable owning the current version of their smartphones. But, once the brand releases the latest version – everybody suddenly wants to sell their old one or finance for the new one.
The same goes with houses as well. However, the reason behind it may differ. The recent pandemic has shifted the way the world lives. People who rented in the city now own a home in the suburbs for the same price. Some have moved back to their hometown, while others are still figuring things out about the current property they own.
Regardless of the situation – change of mind, office relocation, circumstantial changes – the question remains, “Should I sell the house? or put it up for rent?”. A lot of work goes into choosing what’s right for you. And here are some tips that will help clear out some air.
The tenet of the tenant
The first question to ask yourself is whether you care enough to be a landlord or not. As a landowner, you need to know all the rules and regulations of letting your house be for rent. A slight mistake might end you up in a lawsuit. However, it’s not always a walk in thorns.
Once you get a hang of it, things will be much smoother. But, if it feels like it’s not your cup of tea, then consider selling the property instead. Though, there are professionals who will handle everything related to land ownership. So, you won’t have to worry about collecting rent or any other issues.
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What’s the cash flow?
A regular cash flow is an income that keeps coming every month without any delay. This cash flow excludes all the taxes, maintenance charges, insurance, utilities, etc. You should get at least a minimum amount after all the cost cuttings.
Calculate the neighbourhood’s rent amount and deduct all the monthly house expenses you will have to incur. If the difference amount seems profitable, then you should definitely place the house for rent. Because renting the property would earn you passive income!
The ROI
You have invested a pretty hefty sum while purchasing the property. Analyse the total sum you’d receive if you have to sell it right away. Now, do not forget to exclude 10% from the amount you’d receive – which includes depreciation, sale expenses, agent charges and other fees.
If the profit margin is less than what you’ve imagined, then don’t sell it. Instead, wait until the market improves! Choose to let the house be for rent to hold a steady cash flow. You will get enough time to figure things out.
The above determinants should give you enough idea or inkling you are leaning towards. However, deciding to sell or rent it is totally up to your discretion.
