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Why should you rent out your property
1. Why Should You Rent Out Your Property?
If you own a house and you are thinking of buying a new one, you probably think that
the best strategy is to sell your current property to make it easier to buy the new one.
But this is actually not the best you can do. You can rent out your existing property,
which will mean a bit more work, but it will help you make a good investment move. This
can also be the start of building real wealth.
What are the Benefits?
Selling your property sounds like the most logical thing to do since you need money to
pay for the new house you are aiming for. But you can borrow from a bank to finance
your new property and still keep the one you own. Banks will be happy to lend to you
since they feel safe provided that you have enough equity on your existing property.
Buying a second house will also increase the amount that you can lend since they will
use the two properties to assess your collateral. So, in fact, you do not really need to
have ready cash to purchase the new home.
But you have to be careful about taking out a loan that combines the two properties into
one. You can stand to lose your home if something bad happens to you and you fail to
meet payments. The best deal for you would be a separate loan. If you are renting the
property, you can take advantage of some tax deductions if the rent is not doing well.
Renting Vs. Selling
Even if the value of the existing property has increased from the time you purchased it,
there’s a big possibility that you could lose if you sell the property. If there is weak
demand for homes for sale, the value could go down and you won’t realise any profit
from the sale. On the other hand, Christchurch real estate rentals are always in good
demand because not a lot of people can readily start to buy their own homes.
Renting out the property is also a good way for you to wait for a more sensible time to
sell, if that is really your intention. Renting is also a good choice if the selling price for
your house is lower than what it should be. If you need to move to another place right
away, but the home sale market isn’t that good yet, you can rent out the place for the
moment. You might actually profit from the rental and consider the property rental
To gain help in renting out your property, click here.
http://www.assetmanagers.co.nz/