Should You Rent Or Sell Your Second Home?
"I have moved from Pune to Bengaluru. While I own a property in Pune, I have now bought a new apartment in Bengaluru. What should I do with my property in Pune? Sell it or rent it?," asks Naresh Dhingra, an IT professional. You may have been in a similar situation. What should you do? MakaaniQ lists questions you should ask before you decide whether you would want to sell or rent out your second property:
Will the cash flow?
Here consider whether keeping the property and renting it out will be a profitable move or not. How? Simple math. Know the expenses you are making on the property every year and then take the rent you are asking for throughout the year. Are you making money or spending more than you get? This is how you would get to know whether you should rent or sell this property.
Can you handle tenants?
Take Dhingra's case. He is a young professional in Bengaluru with a family to take care of. It could be difficult for him to handle tenants living in a different city. He cannot go and visit them every now and then or resolve any issues for the tenants because he is not physically present there. Moreover, for someone who is already dealing with pressure at work, it might not be easy to handle tenants and the issues that arise at his property in Pune.
In case you are in the same city and can dedicate time for the property, find tenants and take care of the paperwork, you could rent the property.
Can property fetch you a better price in future?
What if Dhingra's property in Pune is located in an upcoming real estate market where the prices will soar in another five to seven years. It is advised that you wait for the market to open and then sell the property at a profitable cost. Till then why don't you rent the property if you can handle tenants?
Can you maintain two properties?
Be prepared for double maintenance expenses and also more house tax. Moreover, in Dhingra's case, his travel expenses are additional. In case you are planning to give the property on rent, consider all these areas. Every time a tenant vacates the property you will have to run certain repairs in the property and over the time it will also undergo wear and tear. If you can handle the expenses because you want to keep the property, renting is a viable option.
Also read: How To Pick An Artwork For Your Home