Do I sell or stick with it

PienMash_2

Good evening everyone,

I have a flat that I rent out - mortgage covers rent and I make about £75 extra each month on it.

Bought for 200k two years ago, stuck 10 deposit down. Now, I reckon it will go for 180k.

I want to move to Australia with gf and say goodbye to England. Do I stick on the market, say goodbye to 20kdeposit or stick with it for another couple of years hoping I can get desposit back - it is a pain and I am lost want to say goodbye to it mentally and not have a reason to be coming back here.

HOWEVER if things go wrong in Oz, could be a safety net for me and I could get the desposit back if houses rise (million dollar question)

Cheers

Will

asajoseph

Houses will rise.......

..... eventually.

The question is when, and it's different in different areas. Make absolutely sure that your property HAS gone down - it sounds like you bought right at the peak, but you never know. Get a couple of agents round and ask their opinions - knock 10% off their estimates, and that's probably a good indication of the minimum you'll get.

What's your equity like now? After just 2 years, have you really already got enough to sell it without negative equity? Unless you have, it sounds to me like you're better off keeping it - right now, it's making you money, and unless you have a fair amount of take-home cash locked up in it that you desperately need to release, it would seem to me that if it's paying for itself with a little bit on top, you're better off hanging on, surely?

PienMash_2

thanks for prompt reply..

it's interest only mortgage (I know, hangs head in shame...)

So, I really will lose the 20k - i've had one agent around and he reckons 185/180, but one on my road very similar, has gone for 180...

and yes, i did buy right at the peak:o

asajoseph

That puts a slightly different spin on it - can you really afford to lose your deposit, and have to fork out (in all probability), at least another £10k? That's a lot of money to walk away from.

I don't know much about the rental market, but are you sure you're charging your tenant enough as well? If you're only left with £75 after just covering the interest, shouldn't you be looking to get a little bit more?

Anyway, unless I've missed something, I'm not sure why you need to sell the house - if there's no equity in it, and you're covering the interest with the tenancy, with a little bit more to boot, surely you're better off hanging onto it for a bit longer, no matter what else you decide to do? Are you expecting to drop onto a significantly worse rate any time soon?

PienMash_2

asajoseph wrote: »

That puts a slightly different spin on it - can you really afford to lose your deposit, and have to fork out (in all probability), at least another £10k? That's a lot of money to walk away from.

What's the other 10k for? I have enough to go to Oz, we're saved on that front.

I don't know much about the rental market, but are you sure you're charging your tenant enough as well? If you're only left with £75 after just covering the interest, shouldn't you be looking to get a little bit more?

Yep, I'm charging max rent - can't stick it up anymore

Anyway, unless I've missed something, I'm not sure why you need to sell the house - if there's no equity in it, and you're covering the interest with the tenancy, with a little bit more to boot, surely you're better off hanging onto it for a bit longer, no matter what else you decide to do? Are you expecting to drop onto a significantly worse rate any time soon?

Just want to get rid really, start a new life, not have it around my neck and not worry about it.

asajoseph

Fair enough, I know the feeling of what it's like when you're trying to chase the dream!

As for the other £10k, well, if you bought at £200k, had a £10k deposit, have only been paying the interest in the meantime, and can now only sell it for £180k, that leaves you owing your mortgage lender £10k right, more or less?

That puts you in the territory of a short sale, and from what I know of it, that way be dragons! I don't know if they affect your credit record, but I'd presume they do, and if that's the case you'll struggle to buy again in this country for a while (though you'll be in Oz, of course!). They also take a lot of negotiating, and indeed, quite a bit of time, as you have to work out with your lender what you can pay back.

wishiwasarichgirl

if it's not costing you anything why would you want to sell it right now? Is it let out through an agent or do you do it all? If you do it I can see why you wouldn't want the hassle, but as you say, it could end up costing you money to sell.

If it was me (and i'm not saying this is the best idea) I would have an agent manage it so I didn't have to worry about it day-to-day (ok they take their cut, but isn't it worth it for the lack of hassle) hang onto it for a good few years and house prices will go up again...... probably! obviously do what is best for you though.

PienMash_2

wishiwasarichgirl wrote: »

if it's not costing you anything why would you want to sell it right now? Is it let out through an agent or do you do it all? If you do it I can see why you wouldn't want the hassle, but as you say, it could end up costing you money to sell.

If it was me (and i'm not saying this is the best idea) I would have an agent manage it so I didn't have to worry about it day-to-day (ok they take their cut, but isn't it worth it for the lack of hassle) hang onto it for a good few years and house prices will go up again...... probably! obviously do what is best for you though.

Can't afford with Oz move to put it on repayment though, so IF they DON'T go up, I am up the wall!!! I'll have a mortgage I haven't paid a penny off in 5 years!!!:eek:

PienMash_2

any more thoughts please

muskoka

I made the mistake many years ago of emigrating - sold the house/car/everything. Returned to UK a year later. Made it much harder to start over, whereas if I had kept the house it would have been easier. You pays your money and takes your choice. Nobody knows what your future holds - but good luck anyway. Aus is fantastic

blunt_crayon

devils advocate but... what would happen if you kept it, emigrated and your tenant moved out when you were in oz...? could you afford to pay the mortgage yourself for a couple of months?