Property decisions.....

Imelda

Hi all,

I just wondered if anyone could give me advice on the best course of action. My OH and I have discussed moving in together and have decided that we are going to live in his flat (better location for work, and better facilities than mine). Our plan is to save hard and eventually move to the country with a small mortgage. The decision is what to do with my flat.
I bought it last year for £118,500 (and you can see from my sig how much mortgage I have on it), flats in my block are currently selling for between £130,000 and £135,000 (although I think this is too high and would estimate that they should be around the £125,000 stamp duty mark).
Now, do I sell it or rent it out?
Renting: For, 1) it will be good to keep a foot on the London property ladder when we move to the country, 2) if anything happens between my OH and I at least I will still have somewhere to live (pessimistic, but I have been stung before).
Against: 1) Having times when the flat is not rented out, this will cut into our savings 2) The hassle of it all!
They rent for £650pcm, the maintenance is £50pcm so I do also have the risk if interest rates go up too much I will be out of pocket (interest is currently £500pcm). I'm not really looking to make a fast buck from renting, it is more of a long term investment and safety net. Or, should I just cut and run with £10k profit?

All advice greatfully received!

CB1979_2

£10k profit minus selling costs

personally if the sums add up I would try and keep it and rent it out.

as you said good to keep a foot in london and also just in case you may split/both decide to come back to sunny london!

but don't forget if you go through a management agency that'll also eat into your monthly rental "profit".

good luck though

lynzpower

Personally, Id sell it.

You dont need the hassle or expense and the host of other legal implications of owning the flat qand renting it out. If the rental income is not high enough to a) cover the mortgage b) give you a nice profit after the voids/expense of tenants, paying the letting agency, wear & tear.

I dont tihnk 10k will be what you actually come out with do bear in mind you have to pay sols fees and ea fees- this can be done on the cheap of course.

Where is your flat again?

Greentea

My advice would be to keep it. You wont be making anything by the time you sell (estate agent fees, mortgage fees/interest already paid). Obviously depends on the market in your area whether renting will be easy or if you will see much capital appreciation in the next few years, in my area, my view is that prices will rise and renting should be possible without you taking a loss for the next few years anyway. Plus you mentioned what if everything goes wrong with your OH, where would that leave you - possible homeless. Why dont you trying renting and see how it goes - you have nothing to loose.

Imelda

Thanks guys,

The flat is in Welling, South East London/ Kent borders.

I have estimated that I will get £10k if it sells for £125,000 and my mortgage is £112,000, I am allowing £3,000 for estate agent and solicitor fees (I am guessing here). I can't redeem my mortgage until next July anyway (well I can but will pay about £5,000 for the privilege) We're in no rush to move in together, I just want to have the decision made.

I am erring towards selling, mainly because of all the extra hassle for no immediate gain with renting. Just wanted to sound it out really and get a few opinions of the experts on here.

Lynz, your new place sounds lovely, are you staying near East London? As you move out I might be moving in!

lynzpower

Yes!
Imelda its a dream this place weve got.

Well be in E11, so still close by, close to central line, gorgeous 2 bed house, garden - with a 300pcm saving to boot - quality. ( watch it all fall through now :rolleyes:)

I dont think its about the capital gain, I personally think you need to project your losses. If you cant afford the losses, ( and I have a feeling you simply cant) then even if you come out with a grand - its better to have that grand in your pocket earning a bit, than be laying out for things you cant afford.

I have been very DFW & MSE about my selling. weve completely repainted, done garden. bought bits of furniture, and got a quote for the seling & used housenetwork, I anticipate coming under the 1200 budget, as long as this sale goes through *madly crosses fingers* If not well have to pay the sol for more time, but reckon we can come in still under 2k.

lynzpower

am i right in thinking you have a 1 bed imelda?

lynzpower

how much is your mortgage per month, and how much would it be to change to a BTL? I mean how much would the mortgage be on a BTL?

Doozergirl

The questions I was going to ask, Lynz

I would be inclined to sell as I doubt the figures will stack up very well. Although there would be a part of me that would like to keep it for a while as a little bit of independence, just in case things didn't work out with boy .

Imelda

Hello,

yes it is a one bed flat.

My mortgage is currently interest only at £506 per month (I pay £110/ month off of the capital) the rate is 5.49%. Taking a look at BTL mortgages I don't think I will have to pay much more than that (mine is pretty high as I took out a 95% mortgage, way before I found this site unfortunately). I would then have to pay an admin fee for the new mortgage, estate agent fees (I would probably have to go down the managed route because I work long hours, and have no DIY abilities whatsoever). I just don't think it's worth it.

Just spoken to lovely boyfriend and he has suggested that I move into his flat, keep my flat on for the time being (he will continue to pay all the bills on his flat, I will just chip in for food) and get it in decent shape for selling next summer (not major things just decor). Not ideal as we will be paying 2 mortgages for at least 8 months but at least we should know by the end of that time if things are going to work out in the longer term.

Doozergirl

I think that's probably the right thing to do

If you're feeling confident you could always let it for six months and then give it a lick of paint!