Before you emigrate or semigrate, you need to decide whether to sell or rent out your current home.
Relocation, whether within South Africa or overseas, is a big decision for anyone, but for those who own their homes, the next choice to make is whether to sell their property or let it.
This decision can be based on personal circumstances, but there are also general considerations to take into account, agents say. If homeowners are emigrating for good, says Marlene Snowdon from Century21’s Western Seaboard office, they generally prefer to sell their properties, even at a reduced rate.
But some want to keep their homes as a back-up in case life at the new location does not work out. If residents plan to relocate permanently and also emigrate financially, selling their homes may not always be the best option, she says.
“If the market in their area is a little slow and they don’t get the price they want, then they let it out until the market turns or their value increases with time.” Snowdon says owners of homes in estates are more inclined to keep their properties and let them out as the demand for rentals is “always high”.
The sell or rent out decision is a “deeply personal” one that needs to be made after careful consideration, says Just Property chief executive Paul Stevens. And homeowners need to figure out their personal goals and parameters.
“For example, you may have aspirations of building a property portfolio across the country to spread your risk and harness different opportunities, or you may want to live debt-free in a number of years.
“Understanding your end game allows you to work backwards from there, breaking down what needs to be done to achieve those goals.” Talking about your circumstances with various professionals is another good way to get a sense of perspective, he says.
A financial adviser will look at the situation differently from a local real estate agent. “Your friends and family are also likely to have opposing opinions. Get data-backed insights from various sources to establish what is best for you.”
However, Stevens believes that people who need access to any equity they may have in property for the move – so they can buy another property in their new location or gain access to a country that demands affordability is proven before visas and permit are awarded – should sell.
Other situations where selling is a good option include:
- If it is a seller’s market where a higher price will be achieved in a sale.
- If you are certain that you will not be moving back to your current location in the short to medium-term.
- If the opposite of all this is the case, Stevens says letting your property is the wise option. Echoing this, Richard Hardie, chief executive of Knight Frank, says homeowners should ask themselves these questions when deciding if they should sell their property or let it:
– Will your house make you money or will you need to top it up?
– If it is the latter, is there a long term financial gain by holding on to your asset?
– Is it rentable?
- “Where the property is not fit to rent out or will cost you too much money to maintain while not living in it, then selling is the best option.”
For those who do not want to sell their homes, Corinne Ras, of Knight Frank Letting Atlantic Seaboard, says it is better to have the property generate an income and cover expenses, such as maintenance and rates and taxes, rather than have it stand vacant.