Choosing whether to sell or let your house is not a comparison between a sale price and a rent. Distinguish between the capital available after selling, the money left each month from letting and the wealth you retain. Then check that each scenario funds your next project when you need it to. This method concerns your residential house in French-speaking Wallonia, not tourist accommodation.
Which project does your house need to fund?
Start with the amount you need and the date it must be available. A deposit for a new purchase, a safety reserve and supplementary income do not serve the same purpose. Also choose a common date for comparing your final wealth under both scenarios.
Our method is to establish an evidence-based sale value and a plausible rent for the same house in the same condition. A nearby listing is not enough: location, areas, layout and works must be comparable. The approach behind our valuation report helps place the first scenario in its market.
If you sell, how much capital will remain available?
From the expected price, deduct the debt to be repaid and the costs specific to your sale: agreed fees, documents, necessary works and any bank or notarial costs. Ask your bank and notary for a statement for the planned date rather than using an old loan balance.
Early repayment may incur a charge provided for in the contract. Wikifin explains this early repayment charge (in French). Use the amount confirmed for your transaction, not an assumed flat rate. Also ask the notary to quantify the costs arising from the mortgage position.
Then place this net capital in the timetable for your next purchase. If the dates do not coincide, ask the bank for a bridging solution and its cost before relying on that money.
If you let, what will remain each month?
Start with rent actually received, not just the advertised rent. Prepare the following items using your actual costs and quotations:
- insurance, maintenance and repairs payable by you;
- property tax (précompte immobilier) and taxation of letting;
- any outsourced management and re-letting;
- a reserve for periods without rent and unpaid rent.
Deduct these expenses and reserves, then the full loan instalment, to establish the monthly contribution needed or the cash available. Within that instalment, interest is a financing cost; repaid capital reduces the debt. That reduction does not become available money in your account.
Do not confuse the absence of taxation on actual rents with the absence of tax. The treatment depends in particular on private or professional use and whether the letting is furnished, as explained by Wikifin on rental taxation (in French). Have your situation costed before assuming a net income.
Which constraints could change your decision?
Keeping another home may affect the tax conditions of your next purchase. The FPS Finance sets out the conditions for registration duties (in French), including those for the reduced Walloon rate. Ask the notary to check your situation before structuring the finance.
The stated term of a tenancy does not guarantee that you will automatically recover possession of the house. The SPW explains notice periods, conditions and extensions for a short-term tenancy in French-speaking Wallonia (in French). Examine whether you can take the home back before committing; these rules cannot simply be applied in the German-speaking Community.
For a residential house covered by the EPB regime, also arrange the certificate before offering it for sale or letting and prepare the advertising indicators. The SPW Énergie sets out the obligations and exceptions (in French). Obtain quotations for the necessary checks and works before comparing budgets.
How can you compare without counting the same gain twice?
At the chosen date, compare retained or financed assets, net of debt, along with remaining savings and cash flows. If the reduction in the loan is already reflected in net wealth, do not add the repaid capital a second time. Do not assume any increase in the house price or any return on capital released by selling.
Then test a slower sale, a period without rent and a major repair separately. Quantify the funding shortfall and the reserve required. These are resilience scenarios, not predictions of frequency. Management matters too: establish how much time you are willing to spend on it or the cost of outsourcing it.
What are the answers to frequently asked questions?
Is rent above the loan instalment enough to choose letting?
No. Expenses, tax, reserves and periods without receipts remain. Compare cash flow after all these items, not just rent and the monthly instalment.
Does negative cash flow mean an equivalent loss of wealth?
Not necessarily: part of the instalment may reduce the debt. But your household must still be able to fund that contribution. Debt reduction does not cover your everyday expenses.
Which information should you gather before deciding?
An evidence-based sale value and rent, bank statements setting out the loan position, actual costs, quotations and a tax and contractual analysis. The comparison becomes useful when the assumptions and dates are the same.
Are you considering selling your house? Request your valuation report to establish the sale value for the first scenario before comparing it with a costed letting project.
