14 Aug 2019
Should I Sell or Rent My Property?

Should I Sell or Rent My Property?

0 comments
Guid,Tips,Selling,Auction real estate agents

Thinking of upgrading to a bigger home, but can’t decide if you should sell your current property, or rent it out as an investment property?

WA has just recorded the strongest rental expectations in Australia for the next 2 years, according to the 2019 NAB Residential Property Survey, coupled with the lowest vacancy rate in six years. So if you can afford to, now is a great time to upgrade into something bigger, and keep your current home as an investment property.

 

“Provided you can afford it, you could make yourself an extra $40,000-$60,000 more, if you hang onto your home and sell in the next two to three years, thanks to the state of the WA market and economy.” – Brendan Leahy, CEO of Naked Edge Real Estate

 

Hear Brendan’s top #3 considerations to help you make the best decision for your situation…

  1. Can you afford to keep your home as an investment property?

If you do decide to rent out your home, you will still have your usual rates to pay, plus ongoing maintenance and repairs. With a rental, hot water systems can fail, and air conditioning systems may need work. So provided that these costs won’t stretch you too thin, I would recommend holding onto your home for another two years or so.

 

This is because the core fundamentals (namely commodity prices) are in place for the WA market here to have some significant gains over the next couple of years. Keep in mind it is a different case over on the east coast. The market over there has slowed down – and I think it still has some slowing down to do. 

 

WA is a mining state, and we’ve recorded strong iron ore price exports of $100 per tonne for the last six months, and based on WA treasury estimates, with every US$1 increase in the iron ore price, WA receives an extra $81 million.

 

The AUD exchange rate is helping as well, each time the Aussie dollar drops by just one US cent, WA’s royalty income is expected to jump by $101 million.

 

  1. Can you afford to upgrade without selling your current home?

Ideally, the choice to maintain your property and rent it out will still allow you to upgrade and afford the home you want. Sometimes by selling the property you could borrow an extra $100,000-$200,000… so maintaining your home and renting it out may reduce that capacity.

 

But you might find you can still afford the home of your dreams in that price point. It is a buyer’s market at the moment, which is great for upgraders because house prices have dropped far below home values – and this market will not last long. There are homes in the Perth hills that were previously worth $900,000+ now available for $650,000.

 

It’s a great time to see what’s around, and speak with your lender to see what you can afford. The cash rate is also at an historic low of 0.25%, so it’s an opportune time to get your finances in a position to upgrade, and secure some long-term capital growth.

 

  1. Is being a landlord for you?

If you find you can afford to keep your home as an investment property, consider whether you have the time, patience, and desire to manage your rental yourself, or if you’d like to hire a property manager to do it for you.

Some of the most important tasks of a landlord (or property manager) are:

  • Finding a reliable tenant that pays rent on time and maintains your property.
  • Collecting and lodging the correct tenancy bond with WA bond administration.
  • Conducting regular routine inspections on the property.
  • Organising prompt maintenance and/or repairs on the property.
  • Ensuring all legal paperwork and documentation are filled out correctly and signed (e.g. tenancy agreements, property condition reports, inspection reports, repair requests etc).

If you work full-time and have a family, you may find it difficult to give your tenant and rental the time and commitment it needs - it totally depends on your circumstances, and headspace.

 

If you’d like more information on how a property manager can help you protect your investment, feel free to get in touch with our sister company, We Love Rentals on (08) 6254 6300. They only do property management, and have 10+ years experience in the industry.

 

And if you’d like a second opinion about whether to sell or rent your property in the current Perth market, feel free to call Brendan on 0439 998 867. He’d be more than happy to answer any questions you may have.

Written by Naked Writers

Should I Sell or Rent My Property?
Naked Writers

Naked Real Estate Writers collaborating to bring the latest news and trends in real estate for buying, selling and working in the exciting world of real estate. Is it time for you to get Naked?

View all posts by : Naked Writers

Leave a reply

Your email address will not be published. Required fields are marked *

* required fields

Related Posts

Renting vs Buying A Home: An Introductory Guide

Renting vs Buying A Home: An Introductory Guide

Using Your Home’s Equity To Purchase Your Next One

Using Your Home’s Equity To Purchase Your Next One

What to Consider when Buying an Investment Property

What to Consider when Buying an Investment Property

Need some help right now?

Please fill out the form below with any questions you have. We will get back to you promptly.

4 + 83 =