collaborative post
This is something that I've often wondered about as I'm currently looking at moving to a bigger home after 3 years of living in my first house. If you're reading this, you're possibly also in the process of moving home. You fancy a change - or perhaps a change has been forced upon you - and you're leaving your old home behind. Now, you're faced with a tricky conundrum - do you sell your old home or keep it? Why would you keep it? Well, you can put it up for rent and make some extra money on the side. After hearing that side of things, another question pops into your mind - why wouldn't you put your house up for rent?!
It's a hard decision because so many factors come into play. To help you decide which path to take, here are a few key considerations:
Can you afford to buy a new house without selling the old one?
What's your current financial situation like? If you're in a position where you can take a mortgage out on a second home - and have no financial issues - then it can be well worth it. You'll use the rent from the other house to pay off that mortgage, and then it will help you pay off the new one. Sooner than you believe possible, you'll be the owner of two homes without a mortgage to your name! But, this is only possible if you're able to buy a new home without needing to sell the previous one. In some cases, you might have to sell your old property to have the funds to move into a new one.
What are rental prices like in your area?
Secondly, is it even worth renting your house out? If the rental prices in your area are really poor, it might not be worth the hassle. As you can see on the Track Capital website, certain areas of the country have seen a dramatic increase in rental prices. If it's like this in your area, it's almost silly not to take advantage of it. Imagine you're able to rake in over £1,000 a month from your home?! By contrast, if the rent is too low, managing the extra property can become too expensive. You go through the effort of managing your old home, but don't reap the rewards through the rent.
Can you sell it for a substantial profit?
Lastly, consider how much of a profit you'd get if you sold your home right now. In some cases, you may have bought a fixer-upper that's soared in value since you had it. Selling it now will land you a huge profit that gives you access to lots of money right away. You can then use that money to possibly buy more than one house, letting you put one up for rent anyway! If your house hasn't increased in value by a substantial amount, it might be better to hold onto it and play the long-haul game with a rental.
See, it's a very hard decision to make as you could be taking a risk. Ultimately, the best approach is to weigh up your situation, look at your finances, and possibly consult an expert.
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