Should i sell or rent? Opinions please

spluff

Hi.

I have an apartment in a very good location near the city center which I bought for 80k, it is now worth around 180k.

I have quite a small mortgage of around £580 per month and have been told by the estate agency that I should be able to get around £650 - 700 per month on this property quite easily.

Me and my partner are looking to get another house to live in and have been told we roughly can get 220k for it with a 20k deposit (which we have).

My heads in bits with rumours of the property market and what i should do.....

Should I sell and use the equity to pay off more of the new mortgage or keep it and rent it?

Thanks

liz545

spluff wrote:

Hi.

I have an apartment in a very good location near the city center which I bought for 80k, it is now worth around 180k.

I have quite a small mortgage of around £580 per month and have been told by the estate agency that I should be able to get around £650 - 700 per month on this property quite easily.

Me and my partner are looking to get another house to live in and have been told we roughly can get 220k for it with a 20k deposit (which we have).

My heads in bits with rumours of the property market and what i should do.....

Should I sell and use the equity to pay off more of the new mortgage or keep it and rent it?

Thanks

Personally, I don't think a profit of £70/month is really worth the trouble of being a landlord. Sell it, get a smaller mortgage on your new place, and then no matter what the market does, you'll be able to pay off your mortgage sooner rather than later. The EA likes the thought of the 15% managing fee they can charge on a rental property, but they're not so keen on mentioning the inevitable void periods and tax that will eat into your profit!

realwildone

There really is no debate on this at the moment. The EA are desperate for your business but they do as the last poster said forget to mention all the other problems, voids, etc.

Sell the property and bank or pay off your mortgage. More IR rises are coming and cash/no debts will be king. Unfortunately your EA/letting agent does not make money on that advice. So it won't be the one he gives you.

PoorDave

If someone on what is basically an open internet forum says "£70 a month - go for it!" are you going to do it?!

If it was me faced with this decision today i would only own one property, and use the cash from the sale to fund the purchase. As long as 220k gets you what you need for your lifestyle over the next few years i would only stretch myself that far.

Doozergirl

You wouldn't even be making £70 a month when you consider that the £100,000 you won't be able to put towards your new mortage will be costing you about £500 a month.

Bad Idea. Sell up and move on.

lynzpower

i agree just sell up. For 70pcm its barely worth the wear & tear.

noyk

yep i agree with above posters, IF everything goes well you'll be making a handsome profit of £2.20ish per day.

spluff

thanks for your advice everyone. It does seem everyone is in aggreance here.

I guess the money made on the actually monthly rental isnt too much, but the mortgage I have is an repayment mortgage so every year that someone else is paying to live in the house, the money is coming off that mortgage and when I do sell I will get the money back, plus over a period of time house prices will increase (looking at 5 to 10years)

A friend mentioned maybe changing the mortgage to interest only which would mean I would get more a month (around 300 - 450).

What do you think?

Angela_D_3

Get rid, i had a tenant call me at 2am to tell me their boiler broke, fine but i was in active labour at the time which i told him, did he give a toss. No called 60 times over the next 24 hours. !!!!!!! nightmare, for £70 pm. No chance.

jamminjamaica

i would sell it. renting it out for what you would make on it sounds like an awful amount of hassle. let us know what you decide.

jamminjamaica

Angela_D wrote:

Get rid, i had a tenant call me at 2am to tell me their boiler broke, fine but i was in active labour at the time which i told him, did he give a toss. No called 60 times over the next 24 hours. !!!!!!! nightmare, for £70 pm. No chance.

sorry i have to say your post made me laugh! you have a crazy tenant