My 5 year housing plan - advice please

MFSaver

cottonhead wrote: »

We thought that if we rented a larger house there is no need to sell our current one. We will rent it out to someone else to keep the mortage going so we can get equity from it once we do sell it in 5 years.

Basically I see it as

Buy now = a larger house having put a deposit of £20,000 down and having no savings left and having sold our exisitng home

or

Buy in 5 years = a larger house, some savings left over and the possibility of keeping our first home as an investment

I kind of convinced myself that the 5 year plan is best but my folks are making me have doubts!

Here's another way of looking at it.

If you do rent out your old place, how much profit per year do you think you will make per year after taking into account various costs of letting it out? Now compare that to selling your old place and saving the excess money in a high interest savings account.

If the profit from the latter is the same or higher, sell the old house and rent. At least you do not have to worry about being a landlord for 5 years.