Should you rent or sell your property?
July 2026
Owning a property gives you three main ways to make it work for you: renting out the property long-term, turning it into a holiday let, or selling up entirely.
Today, with the existence of booking platforms like Holidu, renting out properties as holiday homes has become hugely popular. This is genuinely an appealing option, however it is one you should only go into with your eyes open. Understanding your rental yield and weighing up the pros and cons of selling against other types of letting gives you a solid basis for good decisions that fit your lifestyle, financial goals and how much risk you’re comfortable with.
In this article, we’ll try to shed light on the best strategic option by looking at the pros and cons of selling, long-term renting and holiday letting. Essentially, we’ll cover the question of whether you should rent or sell your house.
What should you do with your property?
Although opinions differ, there’s no single answer to whether it’s better to rent or sell. The best decision always depends on the type of owner you are, your appetite for risk and your goals. On top of that, the property’s characteristics and location can shape the answer to the question that brought you here: what should you actually do with it?
A good starting point is understanding what selling or the different types of letting actually mean. Selling fits owners who value simplicity and want cash in hand quickly. A long-term rental, on the other hand, offers predictable, continuous passive income from a property, with less tenant turnover. Turning the property into a holiday let can generate a higher return than long-term renting, but it means more guest turnover and more personal involvement, which costs both time and money. We’ll go through each option so you can make the right call for your situation.
Selling the property: what you should know
Selling is a very common decision for owners, particularly when they want to release capital quickly. Still, before you ask yourself “should I sell my rental property?” and move ahead with confidence, it’s worth knowing all the advantages and drawbacks, as well as the legal nuances around inherited homes or second properties.
Advantages of selling
The main advantages of selling a property are:
- Immediate cash in hand, with the option to reinvest it in property or put it towards other personal projects
- Less management responsibility
- No more maintenance obligations to worry about
- A quicker, lower-risk option
- The possibility of making a profit (depending on how the property market is doing)
- Easier to divide up assets (in the case of inheritance)
Disadvantages of selling
That said, there are also downsides to selling a property, including:
- Costs associated with the sale (including second home tax UK rules on Capital Gains Tax, currently 18% for basic-rate taxpayers and 24% for higher and additional-rate taxpayers, plus estate agent fees and other legal costs)
- Losing out on future rental potential (since property tends to be a stable, appreciating asset)
- A smaller investment portfolio and, potentially, less long-term financial security
Selling second homes or inherited property
It’s fairly common for inherited properties not to be immediately available to sell. This can happen when someone else has the right to benefit from or live in the property, even without owning it. Beyond potentially limiting your ability to sell, this can also restrict your ability to let it out, whether long-term or as a holiday let.
On top of that, even where inheritance isn’t a factor, second homes are taxed differently to your main residence, which can eat into the profit you make. Getting a proper handle on the tax position is essential before deciding anything, and it’s worth speaking to a qualified solicitor or accountant to understand exactly how profitable selling would actually be for you.
Long-term renting: what you should know
Traditional renting is a well-regarded option that government policy has actively encouraged in recent years as part of efforts to ease the UK’s housing crisis. It can work well for owners who are after a stable income, though it comes with its own set of pros and cons.
Advantages of long-term renting
There are plenty of benefits to long-term renting, especially once you factor in how your rental property income is taxed according to your income tax band. Beyond that, it’s worth considering:
- A regular, predictable passive income
- Greater financial stability
- The property continuing to appreciate in value (in line with the wider property market)
- Flexibility to make different decisions further down the line (including selling or switching to a holiday let)
Disadvantages of long-term renting
There are also drawbacks to this type of letting, such as:
- Responsibility for the property, including carrying out maintenance and other contractually agreed obligations
- The risk of tenants falling behind on rent
- The risk of damage caused by tenants
- Lower returns than other types of letting (including holiday letting)
Setting up a holiday home: what you should know
Finally, you might be asking yourself whether you should keep your house as a rental by turning your second home into a holiday let. Below are the main advantages and disadvantages of holiday letting.
Advantages of setting up a holiday home
There are several advantages to registering and running a holiday letting business, such as:
- Higher earning potential from letting a holiday home, especially in more touristy areas
- Flexible use, letting you still enjoy the property yourself on set dates
- Full control over the property and a lower risk of default
- The chance to boost your personal profit during peak season or local events
Disadvantages of setting up a holiday home
Even though, at first glance, weighing up the pros and cons of renting out your house as a holiday let looks overwhelmingly positive for hosts, there are still drawbacks worth considering:
- The need for active, hands-on management
- A bigger investment of time and money
- Income that can vary depending on the season
Should I turn my property into a holiday rental? Criteria to weigh for an informed decision
With all of this in mind, you should already have a gut feeling about which strategy best fits your goals and situation. Even so, when it comes to the rent vs sell house decision, we’d recommend keeping these three criteria in mind:
- Tax considerations
- Actual profitability
- Personal investment
1. Tax considerations
When deciding whether to sell your house or rent it out, it’s essential to weigh up all the legal and tax implications involved, including Capital Gains Tax. It’s also worth knowing that since 6 April 2025, the UK’s Furnished Holiday Lettings tax regime has been abolished: income from holiday lets is now taxed in exactly the same way as standard long-term rental income, with no special mortgage interest relief, capital allowances or pension-related benefits. This has narrowed the tax advantage holiday letting used to have over long-term renting, so it’s well worth factoring in.
Taking all the legal and tax angles into account will give you a clearer picture and could well influence your final decision, helping you choose the best next step: selling, or holding onto the property to rent it out.
2. Actual profitability
How much you actually make depends heavily on which route you take when you sell or let a property. Selling gives you a single, immediate gain, ideal if you need cash straight away. Renting out the property, in any form, is a way of building income gradually. Long-term renting offers a steady, predictable passive income, though a smaller one; a holiday let can bring in more, but it’s less predictable and more exposed to things like the wider economy or seasonality.
3. Personal investment
How much time you have, and how much you want to dedicate to managing the property, also plays into whether you should sell your rental property or keep it.
Selling lets you complete the transaction quickly and with little effort, while renting means committing your own time. With long-term renting, you’re expected to take on contractually defined responsibilities, with a moderate level of ongoing management. A holiday let, on the other hand, demands active, hands-on management, with far more time, dedication and money involved.
Holidu: a strategic partnership
Owners who’ve weighed up whether to sell or rent their property and chosen to turn it into a holiday let can make the process easier by seeking out strategic partners to support the business.
Holidu is a good example, since it makes managing a holiday rental simple and helps every host, including those with no experience, succeed with their business. The platform lets you list your property across 25+ different booking platforms from one central account. That means synchronised calendars across every platform, plus optimal prices suggested by an advanced pricing tool based on seasonality and what competitors in your area are charging. The platform also includes professional photography services and listing description optimisation to make your listing more appealing to potential guests.