You have inherited a flat for which you have no use. Now the question arises: Should you better rent out or sell the inherited flat?
The argument in favour of selling is that it will give you money for new investments. However, you are toying with the idea of waiting a little longer and renting out the flat for the time being. Maybe you will get more money at a later date...
In this article, I would like to help you make the decision to sell or rent with conclusive arguments.
Renting out an inherited flat: Source of income or cost factor?
If you are thinking of renting out the inherited flat for the time being, I can understand that. Due to the current market situation, the property value could still increase. Or maybe your (grand)children would like to have the flat one day.
In the meantime, the rent is a reliable source of income that brings in extra money every month. Moreover, the flat is thus not vacant, which means that they have an additional income in addition to a possible increase in value.
However, this additional income also means more taxes: Rental income is one of the 7 types of income in Austria on which you have to pay income tax. Depending on the tariff level, taxes are due on 0 - 55 percent of the total income.
To get a feel for your personal tax situation, feel free to use our tax calculator for rental income: https://www.arealita.at/allgemein/wohnung-vermieten-der-steuerrechner/
In addition, you as the landlord are obliged to pay for the maintenance costs of the flat: Repairs in the flat or on the house, damage repairs, etc. must be paid by you.
Of course, all these costs do not yet exceed the income you regularly receive from renting out the property. But what happens if the tenant doesn't pay? Then the extreme case occurs in which the rental costs you a lot of money...
In extreme cases, renting costs more money than it brings in
Unfortunately, it happens again and again that fraudsters move into rented flats. These so-called rent nomads deliberately do not pay rent, damage the flat and furniture and are very difficult to get rid of again.
In addition to the long-term loss of rent, there are also high renovation costs...
I certainly don't want to talk you out of renting, but as an expert I feel obliged to also point out the risks and disadvantages of renting.
It may be that you doubt my motives; after all, as an estate agent - who lives from sales - I write against renting. That is not correct, because from my many years as an estate agent in Tyrol I can also tell you as an objective expert:
YOU in particular can take advantage of the current low-interest phase by selling a flat!
Selling an inherited flat: Capital for new investment
Sales prices for real estate in Tyrol are currently experiencing a peak. Of course, you can wait longer before selling, but what if prices stagnate until then or, in the worst case, even fall? Do you want to take this risk?
At present, however, you not only achieve a good price when selling, but can also optimally reinvest the money elsewhere.
Alittle information on the side: You will only achieve the sum of the sales price with rental income after a few decades.
In addition, the money from the sale is immediately available to you. So, as a rule, you do not have to fear fraud if you choose a buyer carefully and go into escrow. This relieves you of any obligations regarding the house from the moment the keys are handed over.
Attention when selling a flat: ImmoESt and sales errors as disadvantages
However, a sale also has its disadvantages: On the one hand, real estate income tax(ImmoESt) is due on the sale of a home. You can find out how high this tax burden is in the article "Selling a house and taxes (part 1/2): How much do you have to pay to the state?"read about it.
Another disadvantage is that many private sellers make mistakes when selling a flat, which can have expensive consequences. I have listed the 3 most common mistakes and how to avoid them in the article "When selling a flat: These 3 mistakes you should avoid".
Rent out or sell an inherited flat? Expert recommends advice!
I hope you have found helpful arguments in this article to help you decide between selling and renting.
If you are still not sure which is more suitable for your situation, my advice is: find a professional who can give you comprehensive advice.
Perhaps you feel, based on the article, that I am the right contact person for you. In that case, I would be very pleased to receive your enquiry by phone(+ 43 512 580 242), email(immobilien@arealita.at) or contact form(click here).
With kind regards
Yours, Bernhard Großruck
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My name is Bernhard Großruck. I work as a real estate agent and appraiser in Innsbruck and would like to give you helpful tips about real estate in this blog.