Should I Sell or Lease My Property? 3 Must Read Tips

To sell an investment property or to lease it? That is always a decision that real estate investors have to make. There are many factors that you have to consider before you decide between these two options. At Property Point, we not only provide accurate valuations, but we also provide professional advice when any of our clients want to sell or lease investment property. So, if you are wondering what the best way forward is, we can help you make the right decision. Below are tips on how you can decide between selling a property or leasing it out.

1. Will this property have positive cash flow?

Firstly, you need to do the math. You need to ascertain if this property will produce positive cash flow or not if you lease it out. To get an accurate answer, look at the expected leasing price and deduct all the expected monthly expenses. With its current valuation, will it be running at a loss or making monthly profits? If the numbers point towards a loss, consider selling. If not, leasing is a very good option.

2. Consider your Return On Investment

In the event that you sell the property in the current market, how many returns will you get on your investment? To get an accurate estimate, assume that 10 per cent of the selling price will go to agent fees, closing costs and other expenses that come with selling a property. If you end up making little or no profit, consider holding out for a little bit and waiting for the market to improve. This will be the best decision especially if the property will have positive cash flows in the event of a lease. If you will make a profit from selling, you need to keep in mind what your return on investment will be. Let’s say that you will make a $100, 000 profit in a sale versus $1,000 per month while leasing. It is better to sell and use the lump sum in other investments instead of leasing.

3. Consider if you can handle tenants or not

Finally, you need to ask yourself if you are willing to become a landlord or not. Dealing with tenants can be very taxing and time-consuming and not everyone has the patience to go that route. If you feel that you cannot directly deal with tenants, you can either decide to lease the property under a real estate agent or sell. After all, is said and done, the decision of whether to sell or lease is a very personal one. At Property Point, we have a fully qualified team of property valuation experts that can make this process much easier for you. Contact us today!