Sell Up or Rent Out?? What would you do?

flutterby123

Is that a question for me? Wasn't sure but if so then yes they have increased the interest rate.

Voyager2002

bigmommamuppet wrote: »

Our v. large debts are all interest free due to most of them being sold on to debt collection agencies, we've not been financially savvy in the past so want to make sure we're not making another mistake.

I don't see the point of repaying interest-free debts. Even if you have the money, keep it in a savings account and earn a bit of interest, or do something with it... Just be sure that you keep up the payments you agreed.

Voyager2002

bigmommamuppet wrote: »

I've posted this question on the DFW board and haven't had much feedback, therefore would appreciate your opinions.

Link to original thread here:

https://forums.moneysavingexpert.com/discussion/4175263

I have the oppurtunity to move (on a long lease rental term min 3 years) to an ideal bigger and nicer house, right next door to mine so no moving costs:). No credit checks needed etc as the neighbours who are our friends are moving back home and are wanting to keep the house as a rental oppurtunity. Consent to let in place, lease etc will be done via a LA, so all above board. They've also said we can treat the home as our own ie decorate, hang pictures etc etc. and potentially buy the place from them in 3-5 years time when they might want to sell. Hopefully by then we would potentially be in a position to buy i.e when our defaults drop off.

So my question to you guys is?

Sell up and pay off our debts (currently 46k) and have a few spare ££ in the bank. Then save the 2.5k a month debt repayments to cover deposit etc when we come to buy again. Are we mad to consider stepping off the property ladder (I've never rented, homeowner since I was 21).

The other option is to rent out our current property and sell up when we're ready to buy, but not sure if I want to become an 'accidental landlord'.

We're in the fortunate position that we can afford the mortgage and rent on both properties until we sell/ rent ours plus the housing market is still quite healthy in the NE Scotland in terms of the rental and selling markets. Therefore I'm keen to have a fresh start so to speak but worried of the risks that may ensue with stepping off the propertly ladder.

Decision, descisions.. to stay on the PL or step off for a few years?

I haven't read the other thread, but one key piece of information is buried in this one. You have a lot of debt that is currently interest-free and with debt collectors. Presumably your creditors keep an eye on your situation and I expect that you are legally obliged to inform them if your income increases. Now, if you were to start receiving rent from your present property that would be additional income; your creditors could then demand increased payments; and MANY CREDITORS START CHARGING INTEREST AGAIN when you are able to make monthly payments above a minimal level.

Fire_Fox

Voyager2002 wrote: »

I haven't read the other thread, but one key piece of information is buried in this one. You have a lot of debt that is currently interest-free and with debt collectors. Presumably your creditors keep an eye on your situation and I expect that you are legally obliged to inform them if your income increases. Now, if you were to start receiving rent from your present property that would be additional income; your creditors could then demand increased payments; and MANY CREDITORS START CHARGING INTEREST AGAIN when you are able to make monthly payments above a minimal level.

Very good point.

bigmommamuppet

BitterAndTwisted wrote: »

How much did your mortgage lender charge you for Consent-To-Let, or did they increase the interest-rate?

£100 for 12 months or £250 for longer term rental. No mention of interest rate yet and we've only just looking at consent to let at the moment, but they've agreed in principal.

BMM

bigmommamuppet

Voyager2002 wrote: »

I haven't read the other thread, but one key piece of information is buried in this one. You have a lot of debt that is currently interest-free and with debt collectors. Presumably your creditors keep an eye on your situation and I expect that you are legally obliged to inform them if your income increases. Now, if you were to start receiving rent from your present property that would be additional income; your creditors could then demand increased payments; and MANY CREDITORS START CHARGING INTEREST AGAIN when you are able to make monthly payments above a minimal level.

We're already paying above the min payments from our orginal credit agreements and fingers crossed none of them are charging interest, but all have been defaulted in the last 2-3 years and most have been past onto DCA's. Yes we would declare the additional income, but if we sell I'll definately pay off the debts as it's a bit of a noose round our neck even though it's interest free. There is always the worry that court proceedings/ charging orders could be actioned a short notice.

bigmommamuppet

PasturesNew wrote: »

I think it's a bit weird to buy a house from somebody who will then live next door.

I do think you should sell and start again though; house prices aren't going anywhere soon .... so you won't 'miss out'.

We live in a small community (13 houses- rural location). The previous owners of our house now live two doors down. The original builders of the house next door now live in the house across the road. Another couple of houses in the village are a brother and sister combo (sister bought brother's house and he built one next to it).

God, reading that back makes us all sound a bit weird :rotfl::rotfl: