Deciding to rent out your Glasgow home rather than sell has many advantages, but there are issues to consider too. To help you weigh up the pros and cons we look at the arguments for and against renting out a property rather than selling – and the circumstances where becoming a landlord could make perfect sense.
The property market is still tipped towards sellers with rising prices and high demand for properties. This is as true of Glasgow as the rest of the UK. So, if you’re looking to move house, and are wondering whether to sell or rent out your property it may seem like a simple decision.
However, there are many things to consider before you decide. Rising house prices mean your Glasgow home is growing in value, so there are arguments for hanging onto the home in the long term. House prices in Glasgow are currently up by 6% on a year ago, according to Rightmove.
Rents across the UK are also rising. In Glasgow the average home rents for more than £1,200 a month, according to the home.uk website, and almost £1,900 for a three-bedroom property. Even after tax and the other expenses of being a landlord, this could mean a useful boost to your income.
If you are trying to decide whether to sell or let your Glasgow home, there are a few scenarios where renting out the property could be a wise move.
If you’re relocating for work
If you are moving away from Glasgow because you’ve found a new job, or want a change from urban life, you might decide to rent out your property while you settle in to your new environment. Moving to a new area comes with risks, and if you keep hold of your Glasgow home, you can always return if things don’t work out.
If you’re moving in with a partner
Again, renting out one of your properties is a useful precaution – in case things don’t work out. This is particularly true if you haven’t known each other very long before taking the plunge and moving in together. It’s advisable to draw up an agreement from the start about how you will cover the mortgage and other bills and what happens to both houses if you split.
If you’re struggling to sell
While the property market is hot right now, it could still be the case that you’re struggling to sell your home or that your sale falls through. If you have an immovable deadline, such as a change of job, it might make sense to rent out your home for now. However, it’s worth looking honestly at why the property isn’t selling. If there are issues, you might find it equally difficult to rent it to tenants.
If you’re thinking of becoming a buy-to-let landlord
There are plenty of advantages to becoming a landlord, perhaps the biggest being the monthly income you will receive from renting out the home. Letting out the home you live in could be the start of your property portfolio and mean you won’t need to look for a buy-to-let property, secure a mortgage deal or pay stamp duty. However, you must check with your lender first, if you have a residential mortgage. You will also need to register as landlord in Scotland and get up to speed with the legal obligations on landlords in the country.
If you want to hand the property on to your children
Glasgow is a great location to own property and your spare home could be a valuable asset to hand on to your children or grandchildren, whether or not they choose to live or study in the city. By renting out the home now rather than selling up you can hold onto the property for them to decide how they will use it.
Things to think about first
- Before you decide whether to sell your property or rent it out you should consider first:
- Renting out property in Scotland comes with a number of duties – though many of these can be outsourced to a letting agent, you as the landlord are responsible.
- You may need to update the property to make it appeal to your target market which will mean spending money.
- You will need to attend to all the legal and practical necessities of becoming a landlord – registering for self-assessment and paying tax, registering as a landlord in Scotland, obtaining licence if the property is a house of multiple occupation, changing your mortgage to a buy-to-let one and updating your insurance to a landlord product too.
- Remember that there are risks to renting out property, including a tenant who damages the home or fails to pay their rent – you can’t be sentimental about your former home if the worst happens.
If you’re finding the decision hard, talk to us. We’d be happy to advise you more about the pros and cons of renting our property rather than selling in Glasgow right now. Give us a call today.