Pitfalls to going into rented

mpsavuk

No pitfalls. Possibly more short term advantages:

1 Gives you breathing space to look around for another place to purchase, you won't be stuck in a chain.
2 You will be proceedable buyers in rented accomodation even if you have to sacrifice a few months rent. Big advantage.
3 Interest on equity from home sale can be enough to cover rent or a significant amount of it
4 House prices may go down saving you money?
5 Chancellor may increase stamp duty threshold in the next budget saving you money? (you never know!)

Thats all i can think of for now cause dinners nearly ready!

Doozergirl

I wish my dinner was nearly ready. I've got people coming ruond and I haven't even worked out what to cook yet.

Downside to renting is that you can't put your own stamp on the property and there are weird, annoying little niggles. Like I can't put my TV where I've put it and paid for a new stand to hold it because the landlord failed to tell us that the aerial socket doesn't work there :wall: and the shower drips constantly. Not that bad, but if it was my house, I wouldn't think twice about fixing it.

But our money is somewhere now where it's working better for us and the rent is cheaper than if we'd taken out a big mortgage.

Penny_Farthing_2

My dinner's half ready so just a quick fact. We'd have 250,000 to stash away and earn interest on. We'd need 3+ bedrooms as we are 5 of us.
Back later

lynzpower

PF where abouts in the world are you

250k is a serious amount of dosh in the bank. I wouldnt like to hazard how much you will make monthly on this, as once it gets near the big numbers I tend to make mistakes :rolleyes:

I hazard that the interest itself could even pay the rent for you, of course depends where in the world you are

silvercar

interest on £250k should give you about a grand a month.

plus side of renting is you can buy a house and get some work done before you move in.

downside is you will feel pressure to find somewhere quickly if a landlord wants his house back after the 6months tenancy and you can't face moving yet again.

Risks are houseprice movement while your out of the market.

Penny_Farthing_2

As we are leaving a big house (and mortgage) and looking to get something more manageable, we may well have storage costs to think of. The equity will soon be eaten up when we buy and we will need to have a (smaller) mortgage too.

Doozergirl

Are you planning on moving to another big house again? If not, then you're better off being brutal than paying for storage.

noyk

1k per month would get you a nice 3 bed almost anywhere, even some parts of london. I've been happily renting for 7-8 years and i've never had been given notice by the landlord (crosses fingers, touch wood) - it happens far less than people perceive. Being in your position, it shouldn't be much of a problem.

Open a Icesave account (5.2%) stick it in there or equivalent and you'll get 13k per annum before tax.

pknottm

Hi there...

Equity of £250K should give you £891.67 a month after tax for a basic rate tax payer at the Coventry Building Society Rate of 5.35% (although you also have to pay in £1K a month to get this!!)

A typical 3 bedroom house in a nice area in Nottingham can be rented for £600-£700.

The other advantage of renting is that you don't have to move properties all in one day. If the property has been rented before the completion date, this extra time can be used to move in at a more leisurely pace!
However, the downside is that you have to move twice!!

We are also moving into rented before Christmas when our house sale goes through, as we haven't found our ideal house yet! Hopefully there'll be loads of new properties coming on the market again in the Spring...and we'll be in the ideal position to move quickly!

Paul!

lynzpower

welcome paul . Im in the same boat too - we are going on the market tomorrow with a view to moving into rented around January- hopefully!