You have decided to move.
Perhaps you are buying a bigger home, relocating for work, moving in with a partner or simply ready for somewhere different.
The obvious next sentence often sounds like this:
Maybe.
But what if the property would make a perfectly workable rental?
What if a tenant could contribute significantly toward the cost of retaining an asset you already own?
And just as importantly:
Those are two separate questions — and you need a sensible answer to both.
“I’m moving, so I need to sell.”
“We bought another house. I want to put this one on the market.”
“We can certainly assess it for sale. Before you decide, do you also want to know what it could realistically rent for?”
“I've never thought of myself as a landlord.”
“Then let's look at two things: whether the property makes sense as a rental, and whether being a landlord makes sense for you.”
The property test and the landlord test.
Passing one does not automatically mean you pass the other.
What could it realistically rent for?
Not what you would like the rent to be.
Not the highest rental advertised in the suburb.
What would a suitable tenant realistically pay for your specific property in the current market?
Overpricing a rental can be expensive. A higher asking rent means very little if the property sits empty while you continue paying every ownership cost yourself.
Ask About Rental PotentialR12,000 rent does not mean R12,000 profit.
Your property may still have expenses such as:
The objective is to understand what the property costs to retain after the rental contribution is received.
Our guide Can You Afford NOT to Rent Out Your Property? goes deeper into this calculation.
What happens if there is no rent next month?
Good tenants move eventually.
A property may need repairs before the next tenant moves in.
It may take time to find the right replacement.
Your bond, rates and other obligations generally do not stop simply because the property is temporarily vacant.
Can you afford to repair your property while somebody else lives in it?
A tenant paying rent does not take ownership responsibility away from the landlord.
Things still break.
Depending on the property and circumstances, you may have to deal with:
A rental works far better when the owner has enough financial breathing room to deal with normal property problems without treating every repair as a crisis.
Are you prepared to say “no” to the wrong tenant?
An empty property can make owners impatient.
That creates one of the most dangerous rental decisions:
A prospective tenant should be assessed using relevant information such as affordability, supporting documentation, credit information where lawfully obtained, employment details and previous rental conduct.
The objective is not to find someone who wants the property.
It is to make a properly informed decision about a suitable applicant.
Can you stop treating it like “your home”?
This can be surprisingly difficult.
You may have painted every wall yourself.
Your children may have grown up there.
The garden may look completely different from the day you bought it.
But once another household rents the property, it is their home for the period of the tenancy.
Emotional attachment is understandable. But day-to-day rental decisions work better when the property is managed professionally and consistently.
How involved do you want to be?
Becoming a landlord does not necessarily mean doing everything yourself.
A+ Properties offers different levels of assistance depending on how much responsibility an owner wants to carry.
Full Management
For owners who want professional assistance throughout the tenancy.
Tenant Placement
Get help with marketing, applicant assessment and the initial rental process, then manage the tenancy yourself.
Self-Management Support
Remain hands-on while using professional support for selected documents, records, screening and rental processes.
Do you have the time?
A rental property can be wonderfully quiet for months.
Then, at 16:30 on a Friday:
None of these automatically make property management difficult.
But they do require somebody to take responsibility for them.
Are you prepared for the administration?
Renting property is not simply:
A properly run tenancy can involve:
A self-managed rental can work extremely well, but self-managed should not mean undocumented or informal.
Owners who want to remain involved can also look at professional support for self-managing landlords .
Have you considered the wider financial implications?
A rental property has financial consequences beyond the monthly rent.
Depending on your circumstances, matters such as taxation, financing, insurance and future disposal of the property may deserve professional attention.
A+ Properties can help with the property and rental side of the decision.
Where tax, financial-planning or legal advice is required, it should come from an appropriately qualified professional who can consider your particular circumstances.
How many of these can you answer “yes” to?
Becoming a landlord may make sense if…
Selling may make more sense if…
Read When Selling Your Property Makes Sense if the sale option is starting to look stronger.
Sell it or become the landlord?
Use the A+ Property Decision Score™
Compare selling, renting, keeping and waiting using a structured decision tool designed to get owners thinking about the property, the finances and their own circumstances.
We don't think every homeowner should sell.
We also don't think every homeowner should become a landlord.
The property and the owner both have to fit the strategy.
Sometimes the rental numbers are strong but the owner wants no part of managing a tenancy. Sometimes the owner loves the idea of keeping the property but the numbers simply do not work. A sensible decision looks at both sides.
Related A+ property guides
Can You Afford NOT to Rent It Out?
Calculate what the property could do for you if you kept it.
Is Your House Making You Money or Costing You Money?
Look beyond the bond repayment and understand what the asset is really doing.
Should You Sell or Rent?
Seven practical questions every property owner should consider.
Find out whether the property could work as a rental.
A+ Properties can help you compare likely selling value, realistic rental potential and the level of landlord support you would need. Then you can decide whether becoming a landlord is a sensible alternative to selling.