If you're moving and still own your home, keeping it as a rental makes most sense when the rent will comfortably cover the costs, the property is ready to lease, and you would be happy to own it as an investment in its own right. Selling usually makes more sense when you need the money for your next home, when the house needs real work before a tenant could move in, or when being a landlord from a distance isn't something you want to take on. Tax matters too, and that part is a conversation for your accountant before you decide, not after.
The decision is easier once you have two numbers in front of you: what the home would rent for, and what it would sell for. A rental appraisal and a free market appraisal done at the same time give you both, for the same property on the same day.
Start with what it would rent for and what it would sell for
Most owners have a rough feel for one number and a guess at the other. Putting them side by side changes the conversation. A home that would rent well but sell slowly is a different decision from one that would sell quickly but rent for little more than it costs to hold.
Both figures should come from recent, relevant evidence rather than online estimates or what a neighbour got. For a standard house in town, that evidence is usually easier to find. For acreage, rural lifestyle or unusual homes, close comparisons are often thinner, so the reasoning behind each figure matters as much as the figure itself.
Will the rent cover the cost of keeping it?
Compare the rent with everything it costs to own the property as an investment, not just the loan repayment. That usually includes council rates and water charges, landlord insurance, property management fees, routine and unexpected maintenance, and the odd week without a tenant between leases. If your loan was set up for a home you lived in, check with your lender or broker whether anything changes once it becomes an investment.
A property that only works on paper if it's never empty and nothing ever breaks isn't really working. Leave room for both, especially in an older home or one that hasn't had much spent on it for a while.
What changes for tax when your home becomes a rental?
Two things are worth understanding before you decide, and both need advice specific to your situation.
The first is capital gains tax. The Australian Taxation Office allows you to keep treating a former home as your main residence for up to six years while it's rented out. While you do, you can't treat another property as your main residence, apart from an overlap of up to six months when you move house. That affects the home you move into, so it's a choice to make with your accountant rather than by default.
The second is Queensland land tax. The land tax home exemption doesn't apply to a home that's rented out. Whether you actually pay land tax then depends on the total taxable value of the freehold land you own. For individuals, the Queensland Revenue Office threshold is $600,000 at 30 June, so it's worth checking if you own other land.
Neither of these means you shouldn't rent. They're part of the real cost of keeping the property, and they're easier to plan around before a tenant moves in.
Is the property ready to be rented?
A home you've lived in comfortably isn't automatically ready for a tenant. Queensland rental properties must meet minimum housing standards from the start of a tenancy and throughout it. Smoke alarms must be interconnected photoelectric alarms that meet the current Australian Standard, and the RTA smoke alarm requirements say they must be tested within 30 days before a tenancy starts. If the home has its own pool, a pool safety certificate must be in place before the lease is signed, as the QBCC pool leasing requirements explain; a shared pool, such as one managed by a body corporate, follows a different process. Review your insurance too, because cover written for an owner-occupier may not suit a tenanted property.
On the Cassowary Coast, timing matters as well. A home being leased heading into the wet season should have its gutters, drainage, roof and ventilation checked first, and our guide to what an investment property owner should review before the wet season covers that list. Small jobs are far easier to sort before a tenant moves in than after.
Can you look after it from a distance?
This is the question owners tend to underestimate. When you lived there, you noticed the slow drip, the gutter that overflowed in heavy rain or the patch of mould behind the wardrobe. Once you've moved, someone else needs to notice on your behalf, and in a humid climate small moisture problems can become bigger ones within a single wet season.
If you're moving away from the Cassowary Coast, be honest about how involved you want to be. Trades here can take longer to book than in a bigger centre, and repair decisions often need an owner's answer quickly. Good management helps a great deal, but it works best with an owner who is comfortable making decisions about a property they can't easily see.
When selling is usually the better choice
Selling tends to make more sense when you need the equity for your next purchase, when the home would need significant work to meet rental standards or attract good tenants, or when the rent wouldn't cover the costs without regular top-ups. It also makes sense if you simply don't want to be a landlord. That's a perfectly good reason, and it's better to know it now than two years into a tenancy.
A useful test is to ask whether you would buy this exact property today as an investment. If the answer is no, keeping it just because you already own it deserves a second look. If you're buying again, our article on whether to look for your next home before selling covers how to sequence the two.
When renting it out can make sense
Keeping the home as a rental can work well when you expect to come back to the area, when the rent covers the holding costs with room to spare, and when you're comfortable owning it for the long term. It can also make sense for a home you'd struggle to replace, such as a well-located property you'd want to own again later.
What it shouldn't be is a way of waiting for a better sale price. Nobody can reliably say when, or whether, a local market will be stronger, and the holding costs keep running while you wait. If you do rent now and sell later, selling with a tenant in place brings its own trade-offs, which our guide to selling tenanted or vacant works through.
Sell or rent out your home: a quick comparison
| Renting it out tends to suit you if… | Selling tends to suit you if… |
|---|---|
| The rent covers the holding costs with room to spare | The rent wouldn't cover the costs without regular top-ups |
| You may move back, or want to own it long term | You need the equity for your next home |
| The home is ready to lease, or close to it | It needs significant work before a tenant could move in |
| You're comfortable making decisions from a distance | You'd rather not be a landlord |
| You would buy it today as an investment | You wouldn't buy it today as an investment |
The bottom line
There's no answer that suits every owner. The better decision usually comes from the numbers, the condition of the home and an honest look at how you want the next few years to run. A feeling that selling means giving something up, or that renting is a safe middle ground, is a poor guide. Get both figures, talk to your accountant about the tax side, and decide with all of it in front of you.
Want to See Both Numbers Before You Decide?
We can give you a rental appraisal and a free market appraisal on the same property, with the reasoning behind each figure, so you can weigh selling against renting with real numbers. If you're leaning towards keeping it, you can also read about how we manage properties before deciding.
No pressure, and no obligation.
Frequently Asked Questions
Can I rent out my former home without paying capital gains tax?
Possibly, for a time. The ATO allows a former home to be treated as your main residence for up to six years while it's rented out, as long as you don't treat another property as your main residence over the same period, apart from an overlap of up to six months when moving. Whether that's the right choice depends on your circumstances, so check with your accountant.
Do I pay land tax if I rent out my former home in Queensland?
The land tax home exemption doesn't apply to a home that's rented out. Individuals are liable for land tax when the total taxable value of their freehold land at 30 June is $600,000 or more, so whether you pay depends on what else you own. The Queensland Revenue Office can confirm your position.
What do I need to do before renting out my home in Queensland?
Make sure the home meets minimum housing standards, that the smoke alarms are compliant interconnected photoelectric alarms tested within 30 days before the tenancy starts, and that a pool belonging only to the home has a current pool safety certificate before the lease is signed. Check your insurance as well, because a tenanted property may need different cover.
Can I move back in if I rent my home out?
Yes, but a tenancy can only be ended on the grounds and with the notice Queensland law allows, so plan your return around the lease rather than the other way round. Check the current rules with the Residential Tenancies Authority before setting a date.
Is it better to sell or rent out a home on the Cassowary Coast?
It depends on the property and the owner more than the region. Rents, sale prices and holding costs differ between towns and property types, so compare what your particular home would rent for and sell for before deciding.
Further Reading
Whichever way you are leaning, these guides cover what usually comes next:
What Does a Good Property Manager Actually Do?
Why Good Investment Property Record-Keeping Matters
When Should You Prepare Seller Disclosure Documents in Queensland?
