If you’re getting ready to move on from your current property, you might have asked yourself the question: Should I sell it or rent it out?
If you’re getting ready to move on from your current property, you might have asked yourself the question: Should I sell it or rent it out? Let’s explore the nuances of selling versus letting, why one option might be better for you, and how you can plan your next move for the best possible outcome.
Should I wait to sell my house?
Choosing the best time to sell is no easy task. You could try to sell immediately to get a sense of the market whilst advertising. There are some reliable seasonal trends which you could follow, but timing will largely depend on the housing market in your local area. National trends may not apply to the market in your location, so it’s important to speak to a local, experienced agent, such as ourselves, who can point you in the right direction when it comes to timings, local trends and pricing.
Will my mortgage lender let me rent out my house?
It is essential that you speak to a mortgage adviser and check the small print of your mortgage agreement for any limitations before coming to a decision. Many mortgages will include a clause that disallows you to rent out your property, while some may allow you to rent it out with conditions i.e for a certain timeframe.
If it turns out that you do have to change your mortgage, you’ll most likely have to switch to a buy-to-let mortgage. These mortgage deals often charge higher interest rates, but they also allow you to rent out your home and potentially create a revenue stream. Its unlikely you’ll be able to make an immediate decision as you will have to consider upfront costs such as early repayment fees, valuation survey fees, and new mortgage arrangement fees.
Advantages of selling
Achieving a good price
Listening to the advice of an expert agent and setting the right asking price will help ensure that you get a great price for your property, which can then be used against the purchase of your next home.
Using increased value
Some people upsize using the increased value of their current home. If the value of your home has increased significantly since you bought it, you’ll be able to use the funds towards the cost of buying a bigger property. Or, if you’re hoping to downsize, your return on investment can be used as disposable income or placed into a savings account.
Moving on
Selling the property means the responsibility transfers to the new owner, including its upkeep and maintenance.
Advantages of renting out your house
A faster move
You may rent out your house to facilitate a faster move, as you can place an offer on your next home as a ‘chain-free’ buyer, which could hopefully mean fewer delays in the conveyancing process.
Additional income
Renting could be a great option if you would benefit more from a steady stream of income, rather than a lump sum. Additionally, if you’re working abroad and plan on returning home at some point, renting it out will supply you with an additional source of income in the meantime.
Value growth
House value tends to increase over the years in which you own the home, so by renting it out for a few years instead of selling, you might be able to achieve a higher sales price, plus any additional income you made from rent.
Don’t forget, your agent can advise what is the best way to take advantage of the current market and local trends. Perhaps the demand for your property type is more in sales than rental or if the sales market is proving slow perhaps a 12 month tenancy might give time for momentum to build.
Loughton Estate Agent, Hornchurch Estate Agent, Ongar Estate Agent, Wanstead Estate Agent, Canary Wharf Estate Agent
