Should I Sell or Rent My Property?

The Sell vs Rent Decision Framework

This is one of the most common questions property owners face when relocating, upgrading, or downsizing. The answer depends on your financial position, the property's performance, and your personal circumstances.

When Selling Makes Sense

1. Low Rental Yield

If your property's gross rental yield is below 3%, the rental income may not justify the holding costs. Calculate your yield:

Gross Yield = (Annual Rent ÷ Property Value) × 100

Example: A $1.2M house in Paddington renting for $750/week = $39,000/year ÷ $1,200,000 = 3.25% gross yield. After expenses (rates, insurance, maintenance, management, vacancy), the net yield drops to approximately 1.5-2%.

2. High Capital Growth Already Captured

If your property has appreciated significantly, selling now locks in those gains. Brisbane properties that have doubled in value over 8-10 years may be approaching a plateau. Selling and redeploying the equity could deliver better returns.

3. CGT Timing

If the property is your primary residence, you pay zero capital gains tax. The moment you move out and rent it, the CGT clock starts (with a 6-year exemption window). If you're planning to sell within the next few years anyway, selling while it's still your PPOR saves a significant tax bill.

4. Maintenance Burden

Older properties in suburbs like Toowong, Kelvin Grove, or Clayfield often require $10,000-$20,000/year in maintenance. If the property is becoming a financial drain, selling to a developer or renovator may be your best exit.

When Renting Makes Sense

1. Strong Growth Outlook

If your suburb is in an infrastructure growth corridor (Cross River Rail, Brisbane Metro, Olympic venues), holding for 3-5 more years could capture significant additional capital growth. Suburbs like Woolloongabba, Albion, and Breakfast Creek are in this category.

2. Negative Gearing Benefits

If you're on a high marginal tax rate and the property is negatively geared, the tax deductions can offset the cash flow losses. Run the numbers with your accountant.

3. Tight Rental Market

Brisbane's vacancy rate is well below 1% in most suburbs. Strong rental demand means reliable income and the ability to increase rents regularly.

4. Long-Term Hold Strategy

If you don't need the capital and can afford the holding costs, Brisbane property has historically delivered 6-8% annual returns (capital growth + yield combined) over 10+ year periods.

The Numbers You Need

Before deciding, calculate:

1. Net rental yield after all expenses (rent minus rates, insurance, maintenance, management, vacancy, loan interest)
2. Capital gains tax if sold now (get your accountant to calculate the exact figure)
3. Opportunity cost — what could you earn if you sold and invested the equity elsewhere?
4. Cash flow impact — can you comfortably afford the holding costs if the property is vacant for 4 weeks?

A Simple Decision Rule

Sell if: Net yield < 2% AND growth outlook is moderate AND you have a better use for the equity.

Rent if: Net yield > 3% OR strong growth outlook (infrastructure, rezoning) OR significant CGT liability that would be avoided by waiting.

Seek advice if: You're unsure about any of the above. A 30-minute conversation with a property advisor can save you tens of thousands in tax and opportunity cost. Book a strategy session with our team.

Daniel McCormack

Managing Director, ACRES — Australian Commercial & Residential Group

07 3096 0542About the author →Meet the team →