Sell, rent, or renovate?

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So, you have an existing property, and you’re not quite sure what to do with it as it no longer quite suits your needs.

Maybe it’s too small for your current family circumstances, too big to look after, not in the right location, or needs an update and a touch of TLC.

The question then becomes, do you sell, rent it out, or renovate?

If you’re weighing this up, here the key factors to consider that might help make that decision a little easier, along with the pros and cons of each scenario.

Renovate

You might opt to renovate your property for a number of reasons.

In some cases, renovating could involve altering the property to suit your needs, in others it might be a key step on the path to selling, or perhaps you might renovate the property in order to rent it out.

Renovating might also allow you to increase the value of the home. But renovating isn’t without its cons.

It takes time, planning and involves a cost where there could be the potential to overcapitalise.

If you’re considering renovating, it’s important to understand the effort involved, along with the cost, the time required, the reasoning, and the outcome you want.

Then weigh all those factors against the potential return in terms of liveability, property value, or rental income.  

Rent

Retaining your property and renting it out allows you to keep that residence as a source of ongoing income that you can return to or sell at a later date.

And if that’s the path you’re thinking of taking, there are a few things to keep in mind.

Prior to renting the property out, you need to make sure the property is in good condition. You will also need to select a good property manager, and weigh the financial implications.

For example, if you’re planning to buy elsewhere, what impact will retaining the property have on your borrowing capacity?

While the property will generate an income, there will also be expenses along the way, including rates, maintenance, repairs, and perhaps mortgage repayments.

It pays to consider these within your general financial plan and also factor in any taxation implications.

Sell

Selling the property allows you to release equity that you have in it.

In effect, it provides a financial clean slate where you can move onto a new home without worrying about upkeep, rates and mortgage payments on your previous property.

That said, there are costs involved with selling.

Also, depending on where the property is, and what stage of the property cycle that local market is at, selling now might mean you don’t realise the full capital potential of the property.

In this instance, it pays to consult a good real estate agent, to understand the state of your local market, including the price they believe your property could achieve and whether they feel now is the time to sell or whether it’s better to hold a little longer.

How we can help

If you’re considering buying or selling a property and seeking to understand the current market conditions, why not chat with one of our friendly agents to understand how we can help?

Or feel free to enter your address below to get your instant property estimate.
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