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To Sell or Not to Sell??? HELP!!!

imported_simba
Posts: 8 Forumite
Hi There
Here's a brief waffle of the situation that me & hubby are in:
We live in married quarters and pay less than £200 a month for rent, council tax & water (lucky us I know!!) We also have a property that is currently being rented out. Rent doesn't quite cover the mortgage - we have to top it up by about £30 + pay for anything that needs repairing. The mortgage isn't fixed though and we still have a year left of redemption penalties.
The question is do we sell up and put the equity from our house (about £60k) into a high interest account or should we continue to rent the house out to stay on the property ladder?
Hubby will be leaving the Navy Jan 2007 and we are planning to move a bit further north where properties can be cheaper. Our current house is just on the outskirts of the M25.
Should we stay on the property ladder & pay out money or sell up & make money?? I really am clueless! Any help is much appreciated!
Thanks
Here's a brief waffle of the situation that me & hubby are in:
We live in married quarters and pay less than £200 a month for rent, council tax & water (lucky us I know!!) We also have a property that is currently being rented out. Rent doesn't quite cover the mortgage - we have to top it up by about £30 + pay for anything that needs repairing. The mortgage isn't fixed though and we still have a year left of redemption penalties.
The question is do we sell up and put the equity from our house (about £60k) into a high interest account or should we continue to rent the house out to stay on the property ladder?
Hubby will be leaving the Navy Jan 2007 and we are planning to move a bit further north where properties can be cheaper. Our current house is just on the outskirts of the M25.
Should we stay on the property ladder & pay out money or sell up & make money?? I really am clueless! Any help is much appreciated!
Thanks
something missing
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Comments
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My opinion is, sell it. No one is predicting prices going up (except for panicking estate agents). At the moment you say its losing money, and in a bank it will make money, add to that the fact that moving north is cheaper you cant really lose.0
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If you have a property that doesnt even cover the mortgage, let alone other costs, then get rid. But first check out your CGT position!!!
Either stick the equity in a bank, or invest it back into a couple of houses up north that will give you profit, then you get money coming in, and a choice of houses up north to move into whilst looking for your "ideal" home when you do moveAnything I write is based on my opinion only. Before acting upon any advice from anyone on a forum further professional advice should be sought.0 -
Both of your advices don't make sense. There's no point selling up now and incurring the repayment penalty. I would leave things until nearer the time when that penalty expires, and then think about the choices.
You will save a substantial amount of CGT if you move into the house yourselves, and live there for a while before selling, as some of the gain will then become non-taxable. That would more than pay for the cost of lost rent for this period, and you've got to live somewhere after all.0 -
Are you renting it yourself or through an agency?
If you have been renting through an agency consider ditching them and dealing direct with the tenants saving you probably 10% - 15% per month.
Are you charging a rent comparable to the rates around the area ? Check it out
Have you increased the rent since you first let it?
As MMD says why sell if your redemption penalty is higher than the loss in monthly rental. I would find a way to bridge this gap. When you come to remortgage you may get a better deal (for instance B&W are doing fixed rate deals for under 5.2%)
If you sell the property you are likely to have to do some work on it first (redecorate etc) in order to get top price. The housing market is still a bit slow so it may take you a few months to sell. Personally I would stay with it for now.
I would consider buying Renting out your property for dummies - it gives lots of helpful tips on how to increase your rent etc.0
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