Selling houseto move into rented accomodation !

dougk_2

If thats your view then by all means sell your house and rent.
Just remember your capital will be reducing whilst you rent (and normal intrest after tax won't cover your rental costs).

If you are taking a "gamble" with house prices dropping (slowing would be no good as you will still loose ground - you need a reversal) then why not also "gamble" your profit and invest in shares or other areas of more risk investments?

Personally I think prices will remain static or increase slightly over then next 2/3 years and after that rise maybe 5-10% per year so I'm working on the opposite view to you.

If prices drop I won't sell (and the prices will rise back again - so losing nothing) and if prices rise I may consider selling - but I need a place to live so I will only sell to buy another house!. I never have the intention of renting as to me thats wasting money!

In terms of putting the money into the bank - the solicitor normally receive the funds and will transfer it for you - so it won't look that suspect!

frugal_dougal_3

dibbs26 wrote:

In my opinion I think the market will slow considerably. When it does I may well jump back into it.

DON'T PANIC !!!!



dibbs26,

You have got to live SOMEWHERE. It may as well be in your own property than someone else's where you will have to pay for the privelege.

Also if property prices fell considerably you would not be able to "jump back in" as you would get killed in the rush to buy.

Natelle_2

dibbs26
My advice would be to think about it again - If its your only home DON'T SELL TO RENT!!! If it was an investment property instead your idea might be worth further thought.

Have you considered releasing some of the capital growth in your property and investing in other options, as long as it stacks up properly with additional profit?

I would never sell just to rent, even with the market as calm as it is at the moment.
It will get better in the future and your return on your original £20K will be greater.
I don't believe there will be a property price crash, which is the only way you would really benefit at this time.

dibbs26

Thanks for the tips guys.....look as if I am on my own here !. I may well look at other avenues, like natalies idea.............thank you all for your inputs.

dippy

Lots of people on the Motley fool property - market and trends board have sold to rent. If you're feeling lonely out here, head over there http://boards.fool.co.uk/Messages.asp?bid=51402

They are in the same position as you and have decided to cash in on the value of their property without MEWing (want more debt and liability instead of hard cash in your bank account?) . They have some ideas about how you can make all those fivers and tenners multiply

moneymatt_2

Natelle wrote:

Have you considered releasing some of the capital growth in your property and investing in other options, as long as it stacks up properly with additional profit?

How would this capital be released? If you are thinking of Selling to Rent because you believe the price of your asset is inflated, it'd be extremely unwise to borrow against its inflated value as an alternative!

Also, I think it's slightly inaccurate to present selling-to-rent as a risk, but staying put as the safe option. What you effectively have at the moment is £100k profit - but that profit is at risk of reducing over the next few years. To do nothing, would be to put your future into the hands of fate rather than taking control of the situation - and leaving things to fate is always risky. I think it's because people feel better if they lose something through circumstances rather than their own decisions. I'm not saying that STRing is the right or wrong thing for you to do - just that you weigh everything up and make a positive decision on your own beliefs - rather than leaving it to chance because doing nothing seems like a safe option.

A third way would be to hedge your bets slightly buy selling up but retaining a stake in the property market - just in case prices do rise. Various options: you could buy a cheaper house to live in or let (there's perhaps an oversupply of BTLs but you'd have the advantage of not having to pay mortgage interest); you could invest in a property fund; you might even - though I don't know too much about this - bet on the futures market (which currently suggests prices are going down) so that if prices in fact go up, you'll make a profit anyway to compensate any losses of selling the property.

dippy

As with shares, it's all just pretend-money until you've actually made a sale