Selling real estate or renting – which is better?

Sometimes life develops in such a way that the sale of a property comes into consideration. This could be the case, for example, if someone has inherited. But it is also possible that someone has bought a property that has massively increased in value over time. Should one realise this gain? Or would it be better to just rent it out? What to do when you are sitting on so much potential money?

What to do with a property?

It is said that the increased property prices in Germany are due to higher demand. The ECB has lowered interest rates to zero. As a result, many fellow citizens have realised the dream of owning their own property with a cheap loan. But another driving factor is the fact that there was a supply shortage at the same time. So the experts told real estate agency Karlsruhe. Why?

Quite simply. Property owners would naturally like to realise the profit. But then what to do with the money? They can’t get anything for it in the bank. Therefore, it is better for them to use their property as a rental property. They hire an estate agent and he then takes care of everything. It’s easy money. Rents come in regularly. Repairs etc. are taken care of by the property management. At least with apartment buildings.

At the moment, financial experts would tend to rent out real estate and not sell it – if there is no sensible use for the money.

When a sale is worthwhile

A sale would make sense if you have a good alternative for what to do with the money. Possible alternatives include shares, funds and ETFs. In other words, securities of all kinds. If you know how to handle money and are a little familiar with the financial markets, you will certainly find a good way to invest it sensibly and achieve a higher return than with rent.

The second scenario would be the case where you realise the value of a property, which has grown massively over the years, in order to seek your fortune abroad. It would be possible. Today, a flat with three or four rooms can fetch a six-figure sum, sometimes in the middle. With such a sum, you could virtually retire in a country with a lower price level. You buy a huge property there. You use one flat yourself, others are rented out. Or, you can do your job in Germany from there, because you can provide your services via the web. Today, this is certainly no longer an unthinkable constellation.

To make this work, you should definitely have a property valuation carried out by an experienced real estate agent before selling. Then you will realise the highest price and can enjoy the fruits of the transaction with all the more capital in your pocket.