Sell up or rent out

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I know, I know, landlords have an awful rep on MN, so taking life into own hands here! I'll try and keep it as brief as possible.

We have power of attorney for elderly relative; they no longer have capacity and are no longer safe at home alone. I have temporarily moved in to care for them, and am doing the groundwork re options. We have found a lovely local care home for elderly relative, cheaper than live in care, small enough they won't be lost in the sea of the elderly and demented, and will be safe and cared for.

They have approximately 3 years of fees in the bank, allowing for price increases and extras like chiropodist, hairdresser, toiletries etc. They also own a relatively new bungalow (couple of years old).

The dilemma is whether we rent the bungalow out, to get some (hopefully) steady income - it wont cover their care costs, but will offset some, and make the money last longer. Ideally we would use an agent for this to handle the day to day running/management etc.

Alternatively we sell up, put the money into various accounts and hopefully gain some interest on the money.

We've heard the horror stories of renting out - non paying tenants, being unable to get the property back even if given proper notice... We understand there is some insurance you can taken out to help if they decide not to pay...

Has anyone been in this situation, does anyone have any gems of advice to give?

Elderly relative is in pretty good health other than dementia and frailty, so potentially could live for several more years yet!

Your situation is so similar to what ours when my Mum was alive.

When she had to move into care we rented out the family home to provide an income and to supplement her (actually quite good) pension. With the cost of care being what it is however she still had to dip into savings every month to make up the balance and provide spending money.
We had the house managed by an agent (we did not live locally so managing it ourselves was never an option) and apart from perhaps thinking that some of the repairs that cropped up from time to time were quite expensive, it worked out ok.
Roll on 3-years and we started to think about selling the house, my Mum's savings were by now below £50k and knowing how long it could take to sell the house (had to give the tennant's notice of course) it seemed to be the only course of action but as it happens it was taken out of our hands when my Mum died.

We never suffered any problems with the tennant not paying but as you say, I believe it is possible to get insurance for this.
When we took back possession of the house we were not too impressed at the quality of some of the repairs carried out (at great expense) by the agent and also the tennant had done quite a few things they had no right to which we felt the agent should have picked up on during the inspections.
That said, with probate sorted the house was sold although it gave us great pleasure to tell the agent they would NOT be handling the sale (something they had taken for granted they would be). 😆

With interest rates much higher than they have been for a long period, it's possible that you could get as much or more from sticking the sales proceeds into savings accounts, plus you don't have the hassle of being responsible for a rental property. The big unknown is what happens to property prices... would you get more or less if you held on and sold later? Personally I would take the certainty of a capital sum now, and the peace of mind of not worrying about tenants / repairs etc.

@Cotswoldbee thanks for your response - really handy to read through it and reassuring we aren't the only ones that have been through this.

@ClematisBlue49 the joys of the unknown 😅 it's those sort of ponderings that keep going round and round. I know we will never know until..maybe 5-10 years in the future, and looking back on it all.

Thanks for the replies though!