In this shaky property market, it can be difficult to know what to do with your property investment. You’ll be given conflicting information from both sides of the fence. Some people will tell you to sell your home, to make the most profits. Others will tell you to rent it out until the property market stabilises. Who do you believe? We thought we’d crack this enigma once and for all. Should you sell or should you let?
Let’s start with the benefits of selling your home. Is this a shrewd investment move? If you’re looking at bringing in profits quickly, then it could well be. If you can turnaround properties on a regular basis, then you can make a nice amount of money each year. The money from the sale of the previous house can be used to buy the next. This means better cash flow and a steady income stream. However, you may be missing out on bigger profits. As it stands, the housing market isn’t at its best. This means the prices are generally lower than what they may have been several years ago. If you can hold onto a property a little longer, you may get more for your money. While you can make quick money by selling houses and moving onto the next, it’s not necessarily the most profitable option. However, you can’t just leave an empty property sitting there. Until the prices rise again. That’s where letting comes into play…
If you chose to let your property out, then you can expect a nice residual income every month. It should be more than enough to cover the mortgage of that house, with a little bit spare. As it stands, the rental market is actually more profitable than selling. This is because people are currently unable to buy homes, due to affordability issues. A lot of people are also being declined for mortgages, as they aren’t earning enough money. If you look at the homes for sale in your area and then compare it to the homes for rent, you’ll see which method seems to be flourishing. There are some downsides to letting, however. In the first instance, you’re going to have to ensure the property is livable. This means a lot of renovations if you’ve purchased a ‘fixer-upper’. You cannot rent a home to someone if it’s not in good condition. You’re also going to want to consider the time and effort it takes, to be a landlord. Unless you’re using a property management company to do this for you, it can turn into a full-time job in itself.
Which Will Bring in the Most Profits?
And so, we come to answer that all-important question. Will selling or letting bring you the most profits? The answer is actually both. At the moment, renting your property out is the wise move. Rental prices are high, and it gives you more time to wait for the property market to stabilise. Once house prices begin to rise again, you should then sell on.
We hope we’ve covered all you wanted to know about selling vs. letting. It may not have been the answer you were expecting, but it’s the one that is going to make you the most money. Of course, many investors want a quick turnaround of their money. In which case, they’re happy to sell on fast. If you’ve got the patience, hold onto that property for a little bit longer.