If you have decided that the time is right to move and relocate, you may well have little option but to sell your home and invest in a new one. Some individuals may be able to independently afford a second home without selling the first one, however, creating additional choice for home-owners and exposing them to the potentially lucrative world of investment. Choosing whether to rent or sell a home can be a difficult decision, however, and one that can be conflicted by emotion and ignorance.
With this in mind, here is a breakdown of the key considerations that need to be taken prior to making a decision.
- What are your financial Circumstances?
Before make a decision between selling your property and renting it out, it is important to consider your financial circumstances. While you can cover the cost of your existing mortgage should you choose to rent your home out to a private tenant, for example, the new property that you invest in may cost more to repay and place a greater strain on your finances. If you have little margin for error in your finances and are not able to create a fiscal contingency plan, you may be best advised to sell your home and build wealth for the future.
- What are your long-term financial goals
If you have keen to invest, renting your home may be the beginning of a profitable and lucrative long-term venture. It is not just an issue of collecting rent, however, as you must also carry the financial responsibility for completing maintenance work, repairs and carry costs on any property that you own. This needs to be factored into your goal planning so that you have a realistic impression of what property investment is like, as this will help you to shape your financial planning and refine your aspirations for the future.
- What is the state of the Retail Estate Market?
The real estate market is known to fluctuate wildly from time to time, and this should have a key bearing on whether you sell or rent your home in the future. The market is currently experiencing excellent growth (both in terms of sales and rental values), for example, although this is expected to plateau and become more manageable in 2016. Given that the UK property market is forecast to grow steadily and consistently for the next three years, it may be wise renting your home out next year and as price point’s rise steadily.
Location is also a key consideration, so research your local market and trends that will help you to make an informed decision.