My house isn’t selling. Should I rent it instead?

When a property has been on the sales market without attracting an acceptable offer, renting it out can seem like a sensible Plan B.

Rather than leaving the property vacant or accepting a lower sale price, you could generate rental income and consider selling again when market conditions improve.

This can work well, but renting out a home you originally intended to sell is not automatically the right decision. Before proceeding, there are several important questions to consider.

What will it cost to make the property tenant-ready?

A home that is ready for sale is not necessarily ready to rent.

You may need to arrange:

• A Healthy Homes assessment and any required work
• Compliant smoke alarms
• Repairs and maintenance
• Professional cleaning or gardening
• Changes to insurance cover
• Removal or documentation of furniture and chattels

Understanding these costs upfront will help you assess whether renting is financially worthwhile.

What rent can the property realistically achieve?

Your mortgage payments, previous rent or desired return do not determine the property’s current rental value.

The achievable rent depends on today’s market, competing properties, location, condition and likely tenant pool. An accurate rental appraisal should also consider how long it may take to secure a suitable tenant.

Your calculations should allow for rates, insurance, maintenance, compliance, vacancy and management costs. If the rent will not cover everything, consider whether you are comfortable funding the shortfall.

How will the property be managed?

You will need to decide whether to manage the tenancy yourself or appoint a professional property manager.

Self-management can reduce direct costs, but it requires time, confidence and a good understanding of tenancy law. You will be responsible for advertising, tenant selection, rent collection, inspections, maintenance, documentation and any difficult conversations that arise.

Professional management adds a fee but reduces the day-to-day workload and provides support with tenant selection, compliance, maintenance and risk management.

Whichever option you choose, owning a rental still requires ongoing investment and decisions from you as the property owner.

Would selling still be the better option?

If your main objective remains to sell, compare the likely cost of holding the property with the price adjustment required to achieve a sale now.

Compliance work, maintenance, vacancy and ongoing outgoings can add up. In some cases, reconsidering the sale price may provide a better outcome than becoming a reluctant landlord.

Before deciding:

Obtain a current rental appraisal.
Confirm the cost of making the property tenant-ready.
Calculate the likely net return.
Decide how the tenancy would be managed.
Compare this with a realistic sale price.

Most importantly, ask yourself: Do I actually want to be a landlord?

If you are considering renting out a Wellington property that has not sold, Manage My Rental can provide a rental appraisal and practical advice on what would be required before bringing it to the rental market.

Written by Lisa Nimmo
Property Consultant and Business Development Manager | Manage My Rental

Lisa Nimmo works with landlords throughout Wellington, Lower Hutt, Upper Hutt, Northern Suburbs and Porirua, providing rental appraisals and practical advice to help owners maximise returns, minimise risk and protect their investment properties.

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