Wondering what do with your property? Want to sell or rent a house? There comes a time in people’s lives when circumstances may force them to say goodbye to a house they bought. These circumstances may include needing a bigger home, being transferred for work, needing cash that is invested in a property, fluctuation in the housing market, etc.
Whatever the reason, when considering any of these circumstances many homeowners assume they have no other choice but to sell their house. However, this is not the only solution to consider. Unless you need the cash, in some cases, deciding to sell a home may end up being the wrong financial decision. Another option is to rent a house out and enjoy passive income while building equity.
The first thing you need to determine is whether your property has the potential of generating a good cash flow. This requires assessing the home value and the rental demand in your neighborhood. If it’s good, you may want to rent a house rather than sell it off.
Familiarize yourself with some basic property investment metrics such as net operating income, net operating expenses, gross rental income, and cap rate. This knowledge will determine whether or not renting a house will ensure a positive cash flow after deducting expenses. For example, your mortgage, taxes, insurance, utilities, management, vacancy costs, and repairs.
The Dubai property market hit rock bottom in 2007-08. Now, with home prices steadily rising over the past few years it is turning around. In a market where property values are appreciating, it may be a wise move to rent a house rather than to sell it. Rent a house out and you can earn a steady rental income while also building equity. When the market peaks, you can re-evaluate selling the home. Companies like Blueground help tenants receive the best possible ROI on their properties without the usual hassle.
As a landlord, you will be responsible for:
If you are relocating to a new city or simply don’t have enough time, it can be difficult to rent a house out and manage the property on your own. In that case, you may need to hire a property management agency to handle all these responsibilities. You will have to pay the agency commission, but in most cases, it's worth hiring one. The agency will look after the day-to-day property management duties and optimize your rental income. They will retain good quality tenants and reduce the vacancy rate.
When deciding whether to sell or rent a house out, landlords need to consider many factors. Individual circumstances will play a big part in the decision. It is important to look at the pros and cons of each choice first.