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  • FIRST POST
    • Jaffa cake
    • By Jaffa cake 28th Nov 17, 8:37 PM
    • 93Posts
    • 48Thanks
    Jaffa cake
    Deciding to rent out, or sell, the decisions, :( :)
    • #1
    • 28th Nov 17, 8:37 PM
    Deciding to rent out, or sell, the decisions, :( :) 28th Nov 17 at 8:37 PM
    Hi all,

    We very recently finished off our mortgage.

    It had always been our plan to rent this house out when paid for in full.

    The idea all along was to get it paid for, live in it for a year while we save ourselves a deposit for our next house.

    But recently, I have had second thoughts about renting it out.
    Probably watched too many of them "Can't pay, we will take it away" sort of programs on TV.

    I am sure we have all seen the ones where the tenant just stopped paying the rent, and then the owner needed to spend more money, to remove the tenants, on top of the months of lost rent.

    What to do?

    I am really confused now.

    A bad non paying tenant can cause so much problems, not to mention the probable damage to the internals of the house.

    JC
Page 1
    • G_M
    • By G_M 28th Nov 17, 8:50 PM
    • 42,221 Posts
    • 49,015 Thanks
    G_M
    • #2
    • 28th Nov 17, 8:50 PM
    • #2
    • 28th Nov 17, 8:50 PM
    We very recently finished off our mortgage.

    It had always been our plan to rent this house out when paid for in full.

    The idea all along was to get it paid for, live in it for a year while we save ourselves a deposit for our next house.
    Originally posted by Jaffa cake
    Not sure I follow. You wanted to live in it, then once the mortgage was paid off after (20? 25? 30?) years, you planned to rent it out?

    Crazy! Whilst it was morrtgaged you'd have een getting tax relief.

    You "very recently finished off our mortgage" so have been living there 25 odd years.

    Yet you also say " live in it for a year."

    i'm lost!

    Nonetheless, for some ideas on the implicatons of letting it, see:



    * Tenancies in Eng/Wales: Guides for landlords and tenants This thread is intended to provide information to both landlords and tenants relating to Assured Shorthold Tenancies (ASTs) in England and Wales.

    Topics covered:

    * Repairing Obligations: the law, common misconceptions, reporting/enforcing, retaliatory eviction & the new tenant protection (2015)

    * Deposits:
    payment, protection and return

    * Ending/renewing an AST: what happens when a fixed term ends? How can a LL or tenant end a tenancy? What is a periodic tenancy?

    * Rent increases: when & how can rent be increased?

    * Repossession: what if a LL's mortgage lender repossesses the property?

    * New landlords: advice, information & links

    * Letting agents: how should a landlord select or sack?
    • flashg67
    • By flashg67 28th Nov 17, 8:58 PM
    • 2,288 Posts
    • 1,503 Thanks
    flashg67
    • #3
    • 28th Nov 17, 8:58 PM
    • #3
    • 28th Nov 17, 8:58 PM
    Those programmes tend to show the worst of both just for entertainment I suppose.

    I have 2 BTL and, touch wood, so far, so good. I've had the odd maintenance issue of course but have lovely tenants who pay on time & look after the houses.

    I do sacrifice some profit by using a really good letting agent, but does give me some peace of mind and they have tradesmen on call for jobs I can't take on.

    I'd recommend finding a good agent as novices, certainly until you've learnt the pitfalls and requirements of being a landlord.
    I don't regret doing it (yet)
    • Cakeguts
    • By Cakeguts 28th Nov 17, 9:33 PM
    • 3,261 Posts
    • 4,527 Thanks
    Cakeguts
    • #4
    • 28th Nov 17, 9:33 PM
    • #4
    • 28th Nov 17, 9:33 PM
    If you want to buy a house to let you will get on better if you buy a house that fits the part of the lettings market that you want to enter. Not all houses that people buy to live in make good houses to let. Tenants prefer houses that are cheap to heat so a leaky period cottage may be harder to let than a modern insulated house.

    In the area where we let houses 2 bed houses are much harder to let than 3 beds. There are more 2 beds because they are cheaper to buy. Nice 3 beds are more expensive. You have to decide what sort of tenant you are aiming your property at. It is no good just having any old property and hoping you can let it.
    • Jaffa cake
    • By Jaffa cake 29th Nov 17, 1:06 PM
    • 93 Posts
    • 48 Thanks
    Jaffa cake
    • #5
    • 29th Nov 17, 1:06 PM
    • #5
    • 29th Nov 17, 1:06 PM
    Hi all,

    We very recently finished off our mortgage.

    It had always been our plan to rent this house out when paid for in full.

    The idea all along was to get it paid for, live in it for a year while we save ourselves a deposit for our next house.

    But recently, I have had second thoughts about renting it out.
    Probably watched too many of them "Can't pay, we will take it away" sort of programs on TV.

    I am sure we have all seen the ones where the tenant just stopped paying the rent, and then the owner needed to spend more money, to remove the tenants, on top of the months of lost rent.

    What to do?

    I am really confused now.

    A bad non paying tenant can cause so much problems, not to mention the probable damage to the internals of the house.

    JC
    Originally posted by Jaffa cake
    Not sure I follow. You wanted to live in it, then once the mortgage was paid off after (20? 25? 30?) years, you planned to rent it out?

    Crazy! Whilst it was morrtgaged you'd have een getting tax relief.

    You "very recently finished off our mortgage" so have been living there 25 odd years.

    Yet you also say " live in it for a year."

    i'm lost!

    Nonetheless, for some ideas on the implicatons of letting it, see:



    * Tenancies in Eng/Wales: Guides for landlords and tenants This thread is intended to provide information to both landlords and tenants relating to Assured Shorthold Tenancies (ASTs) in England and Wales.

    Topics covered:

    * Repairing Obligations: the law, common misconceptions, reporting/enforcing, retaliatory eviction & the new tenant protection (2015)

    * Deposits:
    payment, protection and return

    * Ending/renewing an AST: what happens when a fixed term ends? How can a LL or tenant end a tenancy? What is a periodic tenancy?

    * Rent increases: when & how can rent be increased?

    * Repossession: what if a LL's mortgage lender repossesses the property?

    * New landlords: advice, information & links

    * Letting agents: how should a landlord select or sack?
    Originally posted by G_M
    Hi, sorry I was not as clear as I could have been.

    We bought this house a couple of years ago, and finished paying it off last week.

    It was always our intention to rent it out after we had saved up a deposit for the next house.
    We think a year to save enough deposit for our next house.

    But now we are swaying on the idea of just selling, and using the full sales value of about 150,000 GBP, down as deposit on our next house. Next house could be a 50% LTV, giving us a great interest rate.

    Or should we stick to original plans and rent it out after we have saved a deposit for the next.?
    • Jaffa cake
    • By Jaffa cake 29th Nov 17, 1:10 PM
    • 93 Posts
    • 48 Thanks
    Jaffa cake
    • #6
    • 29th Nov 17, 1:10 PM
    • #6
    • 29th Nov 17, 1:10 PM
    If you want to buy a house to let you will get on better if you buy a house that fits the part of the lettings market that you want to enter. Not all houses that people buy to live in make good houses to let. Tenants prefer houses that are cheap to heat so a leaky period cottage may be harder to let than a modern insulated house.

    In the area where we let houses 2 bed houses are much harder to let than 3 beds. There are more 2 beds because they are cheaper to buy. Nice 3 beds are more expensive. You have to decide what sort of tenant you are aiming your property at. It is no good just having any old property and hoping you can let it.
    Originally posted by Cakeguts
    Ours is a 3 bed semi, built around 1965.

    All cavity walls insulated, loads of loft insulation, double glazing is 4 years old.

    Heating costs are very low, for example, we pay just 56.00 a month for both gas and electricity.
    • ReadingTim
    • By ReadingTim 29th Nov 17, 3:13 PM
    • 2,214 Posts
    • 3,138 Thanks
    ReadingTim
    • #7
    • 29th Nov 17, 3:13 PM
    • #7
    • 29th Nov 17, 3:13 PM
    I'm grappling with this dilemma too - paid off the mortgage, am looking to move and have additional savings for a deposit.

    Do I (1) rent out the current place, take a chunk of equity out via a BTL mortgage, and use that, plus savings for a deposit on a new place. I'd then need a residential mortgage for said new place.

    Alternatively, (2) I flog the current place and use all of the equity in that, plus savings for a larger deposit on a new place, or a deposit on a larger new place.

    (1) assumes I'd get a residential mortgage in addition to the BTL one, so I'm on the hook twice. Or on two hooks even. I've also got the responsibilities (hassle?!?) of being a landlord, whilst the tax benefits are diminishing, as government policy is decreasingly friendly towards small scale amateur landlords such as I'd like to be. It also means I'll have less money for the new place, although I would have a separate and ongoing source of income (albeit taxable)

    (2) is less hassle and means I can buy a bigger/better place now, but no ongoing income.

    So, what to do? Tempting as (1) is, I foresee more effort for less return as time goes on, making (2) a better choice for a simple life...
    • 00ec25
    • By 00ec25 29th Nov 17, 3:19 PM
    • 5,532 Posts
    • 4,916 Thanks
    00ec25
    • #8
    • 29th Nov 17, 3:19 PM
    • #8
    • 29th Nov 17, 3:19 PM
    So, what to do? Tempting as (1) is, I foresee more effort for less return as time goes on, making (2) a better choice for a simple life...
    Originally posted by ReadingTim
    with risk comes reward

    without risk comes peace (and less income )
    • ReadingTim
    • By ReadingTim 29th Nov 17, 3:57 PM
    • 2,214 Posts
    • 3,138 Thanks
    ReadingTim
    • #9
    • 29th Nov 17, 3:57 PM
    • #9
    • 29th Nov 17, 3:57 PM
    with risk comes reward

    without risk comes peace (and less income )
    Originally posted by 00ec25
    I look forward to further revaluations from you, such as the suspected religious affiliation of the Pope and the toiletry habits of bears.
    • Cakeguts
    • By Cakeguts 30th Nov 17, 12:39 AM
    • 3,261 Posts
    • 4,527 Thanks
    Cakeguts
    Ours is a 3 bed semi, built around 1965.

    All cavity walls insulated, loads of loft insulation, double glazing is 4 years old.

    Heating costs are very low, for example, we pay just 56.00 a month for both gas and electricity.
    Originally posted by Jaffa cake
    For a top rent and minimum periods where it is vacant you will need the house to have a minimum of a downstairs toilet, driveway, back garden big enough for children to play in so not a small paved yard, and for top rents an ensuite bathroom for the master bedroom. A 3 bed is considered a family house so could have a family of 5 which is why the extra toilet downstairs is important and the ensuite to take the pressure off the family bathroom. The house needs to be close to good public transport but not on a main road and in walking distance to a shop where you can buy food. It also needs to be in an area where there are good schools.

    Houses without all of these extra things will let but they won't be at the top of a tenant's choice so you might not get a top rent and it might be vacant more often and for longer periods than a house with the extra toilets etc.

    The insulation and double glazing is standard for a good rental property.

    The extra toilets bathrooms and location of the house is why it is better to buy a specific house as a rental property. An owner occupier someone might pick a house without a driveway or downstairs toilet because they like the look of the house or the road it is in. Someone who is looking to rent somewhere for possibly only 6 months isn't all that interested in how the house looks or a specific road. What they want is convenience. If the house really suits them they may stay longer than 6 months. If it doesn't they can move on so what you really want is a house where it would be difficult for them to find one that is better than yours.
    • LdnFtB
    • By LdnFtB 30th Nov 17, 10:57 AM
    • 92 Posts
    • 94 Thanks
    LdnFtB
    I'm grappling with this dilemma too - paid off the mortgage, am looking to move and have additional savings for a deposit.

    Do I (1) rent out the current place, take a chunk of equity out via a BTL mortgage, and use that, plus savings for a deposit on a new place. I'd then need a residential mortgage for said new place.

    Alternatively, (2) I flog the current place and use all of the equity in that, plus savings for a larger deposit on a new place, or a deposit on a larger new place.
    Originally posted by ReadingTim
    Option 3, flog the current place and only use part of the equity as a deposit, and use the other part to diversify your investments into another asset class (shares, bonds, REITs, commodities, bitcoin etc)
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