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    • Futureproof32
    • By Futureproof32 17th Jul 17, 10:26 AM
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    Futureproof32
    What to do with proceeds of the sale of my Home?
    • #1
    • 17th Jul 17, 10:26 AM
    What to do with proceeds of the sale of my Home? 17th Jul 17 at 10:26 AM
    HI All, my first post and perhaps it will be my most important. I have placed my house on the market with a view to moving to a different area. I want to rent a place for 12 months to make sure it's the correct move for me. I will have circa £270k from the sale after the mortgage and sale costs are paid. I want to rent for a minimum of 12 months. How best should I use the £270k. I have in my mind a mix of ISA to max allowance, PBs to max, and 12 month fixed savings accounts up to maximum limits for insurance/FSA protection. Is this the best option? or I have been thinking that I should buy a house (without mortgage) and rent that out, while renting in the area that I wish to eventually buy and that way I offset some of the rent with the rental income from the 270k property. 270k wouldn't buy me anything in the area I wish to live, so it's not an option to live in that property, which would have to be in another part of UK . I'd be grateful for any thoughts you might have?
Page 1
    • xylophone
    • By xylophone 17th Jul 17, 10:30 AM
    • 23,124 Posts
    • 13,400 Thanks
    xylophone
    • #2
    • 17th Jul 17, 10:30 AM
    • #2
    • 17th Jul 17, 10:30 AM
    You could spread the money about - or you could hold the lot securely in NS&I.

    https://www.nsandi.com/


    http://www.telegraph.co.uk/personal-banking/mortgages/saved-planned-now-have-pay-15000-extra-stamp-duty/ may be worth a read.
    • Jenniefour
    • By Jenniefour 17th Jul 17, 10:41 AM
    • 1,165 Posts
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    Jenniefour
    • #3
    • 17th Jul 17, 10:41 AM
    • #3
    • 17th Jul 17, 10:41 AM
    Had you thought of getting consent to let on your current property while you rent in the area you think you want to live? That would save you buying and selling costs. And if the new area doesn't work out for you then you still have the option of moving back to your current property. Or sell it when you're ready to buy in your new area.
    • Futureproof32
    • By Futureproof32 17th Jul 17, 10:47 AM
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    Futureproof32
    • #4
    • 17th Jul 17, 10:47 AM
    • #4
    • 17th Jul 17, 10:47 AM
    Thanks - the issue I would have is that my current property would only rent for less than 50% of the rental cost in the new area, so I'm not sure that would work. Also, from what i read of the papers I see property values going down rather than up in the next few years and would rather take advantage of a sale now when the market is relatively stable and demand is high as there are few properties on the market at there moment.
    • Jenniefour
    • By Jenniefour 17th Jul 17, 12:07 PM
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    Jenniefour
    • #5
    • 17th Jul 17, 12:07 PM
    • #5
    • 17th Jul 17, 12:07 PM
    Yes, but if you sell up and stash the money then you will have no rental income at all to contribute to your rent in the new area. If you think the market might go down then selling and stashing the proceeds might be the way to go. If you buy a rental property outright and property prices go down in that area you would take a hit on that as well, although you will have had the benefit of the rental income meantime, assuming you get good tenants who pay their rent.

    Perhaps do some more research and calculations on the different choices and different possible scenarios, and see how it works out, including buying and selling costs. Those costs might make big inroads into the money you could get out of new rental property unless you hold onto it for a long time. Also, give some consideration to the obligations (HMRC, legal obligations, etc.) and potential hassle of buying a rental property a long way from where you live. The potential hassle of being a landlord in any event. Tenants need something - how would you sort it out? You would also need to know you can get through any void periods without causing money problems for yourself and have a bit put by for any repairs/replacements/problems e.g. boiler conks out, tenants stop paying rent and you need to evict.

    Are you going to be working in the new area? If so, it might not be so important that the rent from your current property would only cover part of your rent.

    Difficult one, as the situation at present re property prices is uncertain. And general trends do not necessarily apply to some local markets.

    Looks like you're trying to move while deciding which options best protects your money - wise, and there will be some potential risk whichever option you choose as no-one can accurately predict what is going to happen to property prices going forwards.
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