Should we rent out our house?

AliceG

We need to move area for my husband's work. We have had our house on the market for 4 weeks and had an offer, except the buyers have pulled out in less than a week grrr :cool:. We are now considering renting our house out. The offer was for £170k and it looks like we could rent for £700 pm. Is this a good return? We would look at as a long term investment.

We would have a mortgage on the property so we can buy in the new area but we could probably keep in 30% of the value.

Thanks

BitterAndTwisted

No, I think you're barking for even considering it after only four weeks on the market.

Has becoming landlords ever been part of your long-term investment plans?

Lovelyjoolz

It sounds like renting is a bit of a knee-jerk reaction to loosing your buyer. You've had one offer so the house is sellable and you might get another one fairly soon.

You haven't given very much information for us to form an opinion on the situation:

Do you have a mortgage on the current property?
Do you have the cash/ability to buy another house in the new area without selling this one?
Will your mortgage lender allow you to switch to a BTL mortgage?
Do you want to be in the business of being a LL? Because it is a business, not something you should take lightly.

You can't rely on the property being occupied full time because there may well be void periods. Can you afford to pay the bills (CT, Insurance, maintenance & repairs etc.) on it when it's empty and theres no rental income?

AliceG

I have always wanted to be a landlady as I can't work ATM. But in reality I'd prefer to have a property much nearer our new area. Yes, I probably am overreacting to having them pull out. Yes we would have to have 2 mortgages but will not have to stretch ourselves in the new area as property is cheaper.

googler

Are you prepared to be sufficiently detached to regard your former house as a business asset, and no longer 'your' house?

DannyboyMidlands

That'd be a gross yield of less than 5% which is pretty awful and not worth the hassle in my opinion.

mustrum_ridcully

AliceG wrote: »

I have always wanted to be a landlady as I can't work ATM. But in reality I'd prefer to have a property much nearer our new area. Yes, I probably am overreacting to having them pull out. Yes we would have to have 2 mortgages but will not have to stretch ourselves in the new area as property is cheaper.

Could you handle this happening to your former family home (plus a £20,000 repair bill)? Most LL's wouldn't be happy with this happening to an investment property let alone their former family home.




http://www.dailymail.co.uk/news/article-2063189/Tenant-hell-trashed-home-leaving-landlord-20-000-clean--wont-pay-penny.html

Werdnal

OP, there is a lot more to letting property than you possibly realise. As a first step, read this post by GM:

http://forums.moneysavingexpert.com/showpost.php?p=41160642&postcount=12

which covers alot of the things you need to know. There are many pitfalls to be aware of, its is far from easy money - infact can actually cost you a lot financially and emotionally if you get it wrong.

I would perhaps be worried if my property had been on the market for 4 months without any firm interest, but 4 weeks is a little to quick to be panicking like this!