Should I Sell My Rental Property to Pay Off Debt?

Paying off a home loan is hard. I availed of a loan in 2014 and thought I would be able to pay it off easily within 10 years, i.e., by 2024, but now I am struggling to pay the EMI. I, however, have a 2 BHK so I was thinking, should I sell my rental property to pay off debt or not? I discussed this with a colleague and decided not to sell my property. Let me share with you what made me take this decision.

Should one sell or keep rental property?

Now the call is yours. If your debt is huge and you are fed up with the burden, sell your property and just end this tension. However, if the property is bringing you a good sum of money every month and you believe it will have a good resale value, do not sell it. Save the property and sell it only when it is absolutely necessary. Here are some factors to consider and then decide whether to sell your rental property or keep it-

Is the rental profitable to you?

If you depend on the money that your rental property brings you monthly, you should not give up this income stream to pay off the debt. Sometimes, selling property in dire situations brings less profit and makes you lose it forever. So consider the amount of debt. If it is less, manage to pay it off with the rental and other sources of income. Sell the property only if it is absolutely necessary.

What plans do you have for the property?

People have plans for their rental properties. If you have plans for it in the future or want to hold on to it for the long term, try to go ahead with the plan. In my case, I want to buy another property with the money I get from my rental property and lease the new one again. Two properties can bring me a good sum of money and help me out in my old age; hence, I cancelled my plan to sell my current property. 

Consider other ways of paying off the debt

Often, under pressure, people neglect other ways of paying off the debt. So try to find out in what other ways you can earn more and pay off the debt without having to sell the property.

I hope these points have answered your query- Should I sell my rental property to pay off debt or not.