Property: sell it or let it?

A Fin24.com user asks:

I own a property. I'm confused whether I should rent it out, or sell it and invest the money.

Is the property market a sellers' or buyers' market?

John Loos, property strategist at First National Bank, responds:

I cannot give advice because there are too many unknown factors. A good financial planner would probably be useful to the individual asking the question. I can merely point out some considerations one should perhaps take into account.

The decision needs to be based partly on many considerations, including whether the area in which the property is situated is still in good nick and not degenerating, as well as the owner's financial situation.

If the longer-term future of an area looks positive, retaining the property may be a good idea.

However, if one is experiencing financial stress to the point of getting into arrears with creditors, it can be a good idea to sell the property and get back on a solid cash flow footing.

I would say that at present, although the market has improved significantly since the doldrums of a year or so ago, it is not yet a wonderful sellers' market on average, and that property owners/investors would probably need to be in it for the longer term.

I believe it may be a few years before we get into another great selling market.

In the meantime, should you decide to let your property, vet your tenant well (TPN is a tenant credit record agency you could use).

Remember, tenants have also come under financial strain in the recession, and a significant portion have bad payment records.

- Fin24.com