Should I rent or sell my house?

The sale: The quick cut and liquidity

Let's start with the option of selling. Many owners faced with the choice of renting or selling opt for selling in order to free up capital.

The advantages of selling:

• Immediate liquidity: If you need the money to buy a new home or for a trip around the world, the decision of whether to rent or sell is often made quickly. Selling provides immediate capital.
• No administrative burden: If you're wondering whether to rent or sell , consider the effort involved. A sale is a one-time transaction. After that, you have no further obligations regarding maintenance or tenant issues.
• Risk minimization: Property prices can also fall. Those who sell now realize their profit. Those unsure whether to rent or sell often choose the safer route by selling.

The tax side:

When you sell a property, you'll be subject to capital gains tax. The amount depends on how long you've owned it. The longer you've held it, the lower the tax. This is a crucial factor when deciding whether to rent or sell . If you've only owned the house for a short time, the tax will eat up a large portion of your profit.

Rentals: Long-term "concrete gold"

On the other hand, there's the option of keeping the house. When weighing up whether to rent or sell , there are many arguments in favor of renting as a form of retirement savings.

The advantages of renting:

• Passive income: The rental income flows in Regularly . For many who are considering whether to rent or sell , this is a supplement to their pension.
• Inflation protection: Tangible assets protect against currency devaluation. If you're wondering whether to rent or sell , remember that rents often rise with inflation.
• Appreciation in value: In the long term, real estate prices in Switzerland usually rise. Those who decide against renting or selling and hold onto their property benefit from future increases in value.

The hurdles:

Anyone facing the choice of whether to rent or sell must not ignore their obligations.

• Taxation: Rental income must be taxed. While you can deduct mortgage interest and maintenance costs, your taxable income increases. This must be factored into the " rent or sell " calculation.
• Maintenance: A house ages. You need to set aside funds. If the heating system breaks down, it reduces your return on investment. Anyone wondering whether to rent or sell needs to check if the rent covers these costs.

Financing and affordability: What does the bank say?

An often underestimated aspect in the question " To rent or to sell ?" is the mortgage.

If you live in the house yourself, the bank's affordability rules are often somewhat more lenient. As soon as you move out and rent it out, the house becomes an investment property.

• Higher requirements: Banks often demand more equity capital (e.g. 25% instead of 20%) and faster amortization for investment properties.
• Reassessment: If you're considering renting or selling , talk to your bank early. They may cancel your mortgage or require adjustments if you rent out your property. This could influence your decision about whether to rent or sell .

Emotions and strategy

Besides the numbers, feelings also play a role. Is it your childhood home? Are you attached to it?

• Emotional attachment: If you're wondering whether to rent or sell , listen to your heart, but let your head do the math. Renting out a house you grew up in can be painful if the tenant doesn't take good care of it. In this case, renting or selling is also a matter of letting go.
• Future plans: Do you perhaps want to move back in yourself later? Then the answer to the question " Rent or sell ?" is clear: Rent. If you sell, the house is gone.

Scenarios: When is what worthwhile?

help you decide whether to rent or sell , here are two typical scenarios:

Scenario A: Capital requirements for new projects

You want to buy a new, more expensive house. Your equity is tied up in the old house.

The answer to rent or sell is usually: sell. You need the money for new financing. Transferring a mortgage (changing properties) is often complex.

Scenario B: Surplus and provision

You have a comfortable living situation and no money worries. The old house is in good condition and located in a desirable area.

Here, the answer to rent or sell tends to be: rent. The property serves as a secure investment and generates additional income.

Conclusion

The question " Should I rent or sell my house ?" cannot be answered with a simple yes or no. Selling offers freedom, liquidity, and a clear closure. Renting provides ongoing income and capital preservation, but requires work and carries risks such as vacancies or rent defaults.

Make a sound calculation: Compare the potential sale proceeds (after taxes) with the expected net return from renting. Factor in taxes, maintenance costs, and your personal circumstances. The decision of whether to rent or sell should be rational, even if you have a strong attachment to the house.

If you are unsure about the market potential of your property or how the tax consequences of deciding to rent or sell will specifically affect your decision, Loft offers comprehensive data analysis to provide clarity.

Glossary

• Capital gains tax on real estate: A tax levied on the profit made when a property is sold. Its amount decreases the longer the property has been held, influencing the decision to rent or sell .
• Investment property: A property that is not owner-occupied but rented out to generate income. Banks often have stricter financing rules for these properties.
• Imputed rental value: A notional income that must be taxed if you live in the property yourself. If you choose to rent or sell, and opt for renting, this value is eliminated and replaced by actual rental income.
• Maintenance reserve: Money that must be set aside to pay for future repairs. An important factor in the decision of whether to rent or sell .
• Liquidity: The availability of cash. A sale creates immediate liquidity, while a rental ties up capital.