“Should I rent or should I sell?”
As local estate agents, we hear this one a lot when we’re called out by property owners to inspect their homes. It comes as no surprise to us- after all, who in their right mind doesn’t want to get the best return for their assets?
But the plain, simple truth is this:
While there are advantages to selling when the market is in demand, holding a property and renting it out to well- qualified tenants can sometimes be the best move- provided you can comfortably afford to do this.
If you sell, you get a quick cash injection. Obviously, this is always nice to have and at times, the return on the cash (when invested well) can be more beneficial than holding the asset and receiving a slow rental income which may be quite low – say 2 or 3%.
A great return in Sydney in the current market (as of October 2017) is 5% but most commonly, returns are around 2.5 – 3.5%
Historically, the Sydney property market rises. Over a ten year period, property values (on average) double. As it is, the current rate of capital growth is estimated at around 3% for the next few years.
When holding property it’s important to take the ongoing expenses into account. Not just water, council rates and possibly strata levies, but also maintenance – it makes good sense to put aside 15- 20% of the weekly income to cover expenses, on top of ensuring any mortgage commitments you may have.
Here at Shields Gillman, we encourage local property owners to hold onto their assets whenever they’re in a position to do so. We treat the management of properties with the same level of importance as we do sales.
Properties for rent in the Forest area are in reasonably high demand. Prospective tenants seek family homes that are clean and have been well- maintained. Tenants are very familiar with rental property values and quick to seek out those homes which present good value. Similarly, they shy away from homes that appear neglected or are asking top rent.
As a rough guide, modest 3 bedroom homes in the area achieve around $750 – $820 per week and 4 bedroom homes on average rent for around $920 – $1050 per week (as of October 2017). The features and quality of the property are what drive the weekly rent. If you are considering renting your home, ensure that it presents well. The walls should be clean, with the appearance of having recently been painted. The carpets should be new (or near new) and the kitchen and bathrooms should be free from water damage. In short?
The more modern the facilities, the better.
Hopefully this information eases your mind if you’d been losing sleep over whether to buy or sell. We understand that you want to get the best deal for your property, and that you might still have some questions in regards to the property you own. If this is the case, we’re happy to help- and set you straight on any queries you might still have.