Hypothetical question

Imran_s_2

Hypothetical question

You have a loan of 45K
you require another 60K for a project

you have one freehold property with rental income

should you sell the free hold property and with the capital pay of the loan and have money for the project?

or pay of the loan by remorgaging the freehold property and taking enough money for the project?


thanx

opinions4u

If you believe that property values will fall further ("experts" say 10%-15% is yet to happen), then there is a case to sell an asset now if you have a buyer.

This, of course, depends on the rental yield and stability of that yield.

Gorgeous_George

Welcome to the boards Imran. As I see it:

1. If properties are likely to fall be as little as 10% and
2. if you would rather keep the BTL property
3. the BTL makes a profit

Then, it is hardly worth selling. Selling costs and rebuying costs will eat up most of that 10%.

However, there is not enough information in the hypothetical question for anybody to give suitable advice.

GG

Alan_Cross

No, selling would be a dubious option in the current climate. Much better to see the downturn out and hope for the value of your investment to start rising again.

The vast majority of BTL landlords I know have hunkered down and hope to see out the recession.

Oh and BTW the number of 'for sale' boards in my area has been in significant decline over the last month or so. I know about the end of year/ Christmas effect but it seems to me something else is also at play here. Maybe the BTLetters just taking stuff off the market rather than accept poor prices..?