Should I rent it out in the hope the price will increase in the future

LJW_2

Hi, I am thinking of buying my grandmothers house and have a few options one of which is to rent it out then sell it in a few years. Would this be worth doing and are house prices going to rise. Any advice would be most welcome.

LJW:rolleyes:

Matt1069

LJW wrote:

Are house prices going to rise.

Try asking Mystic Meg...

Nigh on impossible to predict and everybody seems to have different ideas, but you weren't very specific on your current situation

Will you be getting it at a discount considering a family member is selling it to you, will you make much profit renting it out after your mortgage payments, B+C cover and decorating and maintenance costs? Also keep in mind Early Repayment Charges if you sell it within a few years, and dont forget EA fees and Solicitor fees too.

Do you already have a mortgage, keep in mind you'll need a minimum 15% deposit for a 2nd home, and you'll have a slightly higher rate too (But-To-Let Mortgage) ,

But my personal opinion is to go for it, i dont expect any HPC, not for a long time anyway, but just don't expect a huge profit from Capital gain if your only in it for a 'few years', why not keep it going for a pension maybe...?

LJW_2

Hi, thanks for the advice. I am new to all this house buying as I have always rented. I am renting at the moment and have been offered the house 11 grand under the EA valuation. Its to small for me to live in and it will need work on it GCH, kitchen, bathroom before I could rent it out. It is also only 1 mile from the new site of the super casino in Manchester which hopefully will increase the price!!

I can't really decide whether it is worth buying in order to make some money on but I don't want somebody else to make the money when I could! It seems a lot of work.

HHHeeeelllppppp:eek: :eek:

Matt1069

Well you answered some of my questions, but the main factor is are you gonna make much profit from renting after paying out for all the costs i mentioned, also, if your 'new to all this' then I'd also recommend you use a letting agent which will also want 10-15% of the rental...

I still say go for it, but to look at it as a long term investment rather than you short term,

and do you really think it being a mile from the new super casino is a good thing...??!! Just make sure you don't end up renting a compulsive gambler who'd rather spend the rent down the road!!!

brasso

What's 11K in terms of percentage reduction?

LJW_2

Hi Brasso, unsure what you mean!

Matt1069

If the place costs £110,000 then your £11k discount would be 10%, thats whats he means...

LJW_2

Thanks Matt, I understand now. Yes it is 10% and Matt you got the valuation spot on! You must be Psychic!;)

Matt1069

No, I'm your stalker and I've just put an offer down for your granny's place, which got accepted, so your too late...

But seriously, as an amateur Landlord myself i can assure you now that being one is a bit more complex than simply buying it and sticking an advert in the paper, i recommend buying and reading this book

Click Here

Then decide if you really think its for you

LJW_2

Thanks Matt, just ordered it.