Should you sell or let when inheriting a property?
Sian Hiatt, Sales Manager, discusses the pros and cons of selling or renting a property that you've inherited...
Estimated reading time: 4 minutes.
If you've inherited a property or have a second home, you may be faced with the question of whether to sell it or let it out. Each option has its pros and cons, and the decision should be made based on your personal circumstances.
Here at CPS Homes, a leading letting and estate agent located in Cardiff, South Wales, we've outlined the benefits and drawbacks of both selling and letting out your property to help you make an informed decision.
Pros and cons of selling your property
Selling your property can give you a large lump sum that can be used for other investments or needs as you see fit. You don't have to worry about maintaining the property or covering any existing mortgage payments. If you already have an existing mortgage on the property you live in, you could even put the cash raised from the sale towards paying that one off - and maybe even find yourself left with plenty spare if you’re fortunate enough.
However, selling your property means you won't benefit from any future increases in its value, and the process can take months or even over a year. There are also additional costs involved, such as conveyancing, removal vans, or clearance costs, and there may be tax implications such as capital gains or inheritance tax.
Read: Fees involved when buying and selling a property
Pros and cons of letting your property
Letting your property out can provide a predictable monthly income, and it can be surprisingly hassle-free if you hand the reigns over to a local property management company. Over time, the money collected through rent could exceed the value you would have received if you had sold the property. Additionally, if your property has a mortgage on it, letting it out can take away the stress of covering monthly payments while you live elsewhere. You still own the property, and you can sell it at any point down the line if you wish to, while benefiting from any increase in its value.
However, there are some potential drawbacks, such as the need to invest in the property to ensure it meets the required standards, the impact of bad tenants, and tenancy voids, which are periods of time when nobody is living in the property, which can affect your income significantly. To let out a property successfully long term you need the right type of property in the right location attracting the right rental yield.
Read: Why landlords use a letting agent
Researching your decision
Regardless of whether you choose to sell or rent out your property, it's a big financial decision that should be taken carefully and with expert advice. Seeking professional advice can help you understand the tax implications and other legal complexities associated with your decision.
Using expert estate and letting agents
Regardless of whether you decide to sell the property or keep it and rent it out, the best thing you can do is enlist the help of an estate agent or letting agent with expert knowledge of the local area. By using local property experts, you can gain access to many additional benefits, such as advice and valuation to ensure your property is listed at the correct rate, help finding the right buyers or tenants, and guidance on how to navigate the entire process for both scenarios.
Additionally, an estate agent and letting agent can provide support when it comes to understanding the legal side of things, from knowing what to look for in your conveyancing solicitor if selling to helping you understand your legal obligations and ensuring that the property adheres to the ever-changing complex laws and regulations if renting.
At CPS Homes, our experienced sales and lettings team can provide the advice and guidance you need whichever route you decide to go down with the property you’ve inherited. For sellers, we offer an initial free property valuation, and for rents we have a variety of property management packages to suit your needs. As an ARLA approved agent, we're committed to providing the best service possible. Contact us today by calling 02920 668585, e-mailing enquiries@cpshomes.co.uk or by popping into one of our three Cardiff based branches to find out more.
The information contained within this article was correct at the date of publishing and is not guaranteed to remain correct in the present day.
