To rent out or sell 160k property

Mizz_Pink

My Dad already rents out a property to my sister so he quite 'up' on the renting game. You are probably right though that its worht more than £500 a month.

RHemmings

Jay1b wrote:

Firstly a £130K house usually rents for about £600, so i'm sure that you would get about £700 for that house. Did the £500 come from a guess or a rental agent? I would get a second opinion for the about of rent you would receive.

Having the money in the back would be less worry, but i think your parents would be better off renting it out. The best thing i would advise is to cough up £25 and have a 30 mins chat with a financial advisor based around your area. Or at least speak to a number of rental agents (obviously these will be biased). You need to look at pure profits, after tax and expenses for each, then judge how YOU think thing housing market will go.

How do you get the figure of a £130K house usually renting for about £600? Where I live a property that will rent for about £600 will usually cost £150,000 - £160,000. I think that the balance between rents and prices differs in different parts of the country. For the figure you quote of £600 for a £130K property, that's a 5.5% gross yield. Not considered a good yield by any of the landlords I've spoken to. Yet it's better than the yield possible in many locations in the UK. The kicker is which way the property market will go of course, but I think your estimate of rental yield is a gross estimation, and that research of the local market is advisable.