Should I not sell and rent out my house?

scoobiesnacks

Following on from my previous thread where I was asking about the merits of selling up and renting, I'm now wondering whether I should not sell my house, but rent it out and then rent somewhere myself.

I'm struggling with the mortgage since separating from my partner, so something has to give. But it's a great house and I'd love to keep it.

The houses on the market that I can afford are overpriced crap as far as I can see, and they're getting more expensive by the day, so it got me thinking that maybe I should keep hold of my place as an investment while I rent and sort my finances out, with a view to moving back when I can afford it, or I meet a rich girlie . I'm fairly sure I would make a profit over £250 a month on the mortgage so the figures stack up, although I realise maintenance and other costs need to be factored in.
Anyone else doing this?

Pobby

Glad you have factored in all the costs.Have you also factored in times when the property isn`t let?It appears that renting is sometimes cheaper than buying.You will most likely have to pay tax on the £250 a week.Me,I would just get a lodger.

sophistica

I have just decided to rent out my flat instead of selling it but like Pobby says you need to fator in vacant periods, 8% estate agents fees and the fact that your place will never look the same after another person/family has been in there BUT if you leave the property market you may find it diffifcult to afford to get back in.

clutton_2

if you do rent it out, please use a letting agent to find you tenants and manage it for you for the first 6 months you let it out, so that you see what is required and how to do it. Tenants who don't pay can be in a property for 9 months and not pay a single penny before the courts can get them out (if you have a poor agent or have got it wrong on a DIY basis ) - by that time your property will have been repossessed.

Tassotti

If you do decide to let it out, don't forget to tell your lender, and obtain Landlords Insurance.

Most lenders won't have a problem, but your interest rate may change (unfortunately, it won't go down)

Find out the new monthly repayments and adjust your figures accordingly. If you do choose to use a letting agent, they will take a hefty lump out of your profit.

clutton_2

""If you do choose to use a letting agent, they will take a hefty lump out of your profit"" - they will take a percentage - but - they will inadvertently teach you how to do it yourself in the future. A builder i know rented to one of his workers, who did not pay one single penny for 9 months and it cost him over £5,000 eventually to get him out - with loss of rent and court costs, bailiffs costs etc etc.

Tassotti

I wonder if that individual is still working for your friend.

As a LL myself, I do take your point about the letting agent. There are so many things to consider when leting a property.

I have also suffered losses.

Credit checks and referencing are the key here. Get this right, and it will serve to minimize losses.

An empty property is better than a property with bad tenants.

clutton_2

- no !! the guy had the blinking cheek to leave a new settee in the house when he was evicted by the bailiffs asking the landlord to look after it until he could come and collect it !!!!!!

there is nowt so queer as folk !!

lynzpower

Sccobiesnax

I saw your post in Martins thread about property debates.

I personally think if everything is going to sealed bids etc then nows the time to make a hefty profit while people are still mug enough to pay silly prices. But you know my thoughts on it so I shahnt bang on

If you are committed to living there & keeping, I would get a lodger in. At least you can evict them fairly easily with a lodgers agreement, and its easy money coming in with very little outlay. PLus you can keep watch over what they are doing to your home.

clutton_2

lynzpower has a point ""If you are committed to living there & keeping, I would get a lodger in."" - the Inland Revenue RentARoom scheme allows you to have two lodgers tax free up to a certain figure rent per year

scoobiesnacks

lynzpower wrote:

Sccobiesnax

I saw your post in Martins thread about property debates.

I personally think if everything is going to sealed bids etc then nows the time to make a hefty profit while people are still mug enough to pay silly prices. But you know my thoughts on it so I shahnt bang on

If you are committed to living there & keeping, I would get a lodger in. At least you can evict them fairly easily with a lodgers agreement, and its easy money coming in with very little outlay. PLus you can keep watch over what they are doing to your home.

Yeah, I've thought about the lodger idea. Having a neurotic dog wouldn't make it easy, but it would be a solution. Maybe I should start charging the dog rent.

I've been saying the market can't keep going up for 3 years but it really could be peaking now. If I'm brave I could get my timing spot on and wait for the market to wobble a bit. Personally I don't think prices are going to come down, or if they do not by much, but it would be nice to have a market where people aren't killing each other to buy something mediocre!