More commonly we’re seeing owners purchasing a new home and choosing to keep their old property as an investment, rather than selling it. This way they can lease it out to supplement income. Before deciding to keep your old home as an investment property, there are a number of factors to consider before making this choice.
- Is it right financially?
Your financial situation will need to be carefully considered. Although you earn rental income if your property is tenanted, it’s important to find out how much you can rent your property for. Be sure to chat to a property manager to understand the market, demand for leasing properties and what costs may be involved.
- Does your home have rent appeal?
Take note of what tenants are looking for in a rental property. Features such as air conditioning and great outdoor areas can increase the appeal of your property and encourage higher rental return. Even showcasing how much storage space your home has can be an incredible selling point to tenants.
- Temporarily vacating
Are you planning on leaving your home temporarily? If you are, keep this in mind when finding the right tenant. They need to be aware of this and you should be transparent that this isn’t a long term solution for housing, give them specific time frames.
- Moving on or up
If you are moving on from your home and looking to up-size, leasing your existing property can be a good idea. It can increase your wealth, helping to secure more income to pay off your larger properties mortgage.
- Emotionally, is it the right choice?
If you find that you are emotionally attached to your home, it can compromise your investment strategy as it’s harder to keep your distance. It’s better to maintain a mindset that the property is purely a financial asset. Consider how much emotional energy it could take up, if your plate is already full and you don’t have time to manage it, it may not be the right choice for you.
If you’re considering buying a new property or renting out your existing home, get in touch with our team and we’ll help you on your property journey.