Renting v Selling - what would you do?

far2812

All you clever people may help me to make my mind up!

I received an inheritance from my parents and bought a repossessed house with it and have totally renovated it. I bought the house outright with no mortgage.

I now don't know whether to sell it or rent it!

I dont live in the house so it is just sitting there at the moment - ready for me to decide what to do with it!

It has been valued at £75,000 - so all of that is mine (ie no debts)

If you were in my position - would you sell it or rent it?

Advice would be greatly appreciated please.

Henry_P_Chester

personally i'd sell. You may not see prices this high for a very long time. The economic outlook for the housing Market is dire at best. Take your profits before the CGT increase.

far2812

But I won't have to pay CGT will I? I live with my partner's parents so it is my only investment/house!

I am scared that if I sell the house then the money will whittle away x

Nosht

If you rent it out you must run it as a business & not a hobby.
Put it into an Asset Trust to lessen the tax implications & inheritance issues but have a will to protect it written by an expert in this.

Regards,

N.

minnie123

Definately keep it and rent it out you will receive a monthly income from it while you are renting it out and over the long term it will rise in value - I don't care what the doom spreaders on this forum say - over the long term property values rise.

Henry_P_Chester

far2812 wrote: »

But I won't have to pay CGT will I? I live with my partner's parents so it is my only investment/house!

I am scared that if I sell the house then the money will whittle away x

Didn't see that bit. Nope no CGT to worry about then. Do you know what similar properties in the area rent for? What's the rental yield?

Fang_3

I'd rent. For the simple reason that you'd always have a property to move into, and you can always sell it when/if you come to buy a new home and if the housing market does take a tumble, so will the house you'll be buying, so you won't lose out in real terms.

Henry_P_Chester

minnie123 wrote: »

Definately keep it and rent it out you will receive a monthly income from it while you are renting it out and over the long term it will rise in value - I don't care what the doom spreaders on this forum say - over the long term property values rise.

I'm not a doom spreader I'm a realist. Low house prices benefit eveyone and the wider economy. I'm spreading optimism.

20 years time house prices will probably be higher than today. 10 years maybe. 5 years no chance.

All my own opinion of course, but I would urge anyone thinking of investing in property to do your own research and don't just assume prices will always rise.

Henry_P_Chester

Fang wrote: »

I'd rent. For the simple reason that you'd always have a property to move into, and you can always sell it when/if you come to buy a new home and if the housing market does take a tumble, so will the house you'll be buying, so you won't lose out in real terms.

True. Would you want to live it yourself at some point in the future?

Owain_Moneysaver

If you rent, then you will have maintenance bills, and a bad tenant or a void will eat into your rental income (and may actually devalue the property). But you will hopefully get a better return on investment than putting the money in the bank, and hopefully some capital gain as well longer-term.

On the other hand if you want to sell it, then now is not a particularly good time to sell - if you want to sell this year then get it on the market now as people with children (for a house that may be your target market) usually prefer to move during the school holidays. And what do you do with the money? Buy a bigger fixer-upper and do the same again?

The CGT exemption is if the property is your sole or main residence ie. you have to live in it, no matter how many other homes you may or may not own.

Or you and your partner could move into it yourselves and enjoy living mortgage-free. Bear in mind that rental income, or a cash asset, will disqualify you from most means-tested benefits, but if you're living in the house yourself you can probably still be eligible for JSA etc (obviously not housing benefit!).

It might help if you said about how old you are, whether you have any pension or other long-term savings, what the mid-term living arrangements with partner's parents are, and how stable your employment is.

p00hsticks

far2812 wrote: »

But I won't have to pay CGT will I? I live with my partner's parents so it is my only investment/house!

But you say that you don;t actually live in the house ? Have you ever ?
If you've never lived in it then it won't count as your PPR and you will be liable for CGT (or possibly income tax if you are making a living out of renovating properties. It doesn't make any difference that it's the only house you own - it's whether you live in it that matters for the purposes of the definition of a PPR for the CGT rules.