is a property renting making no money better than a small investment ?

kidmugsy

The point of investment is to let you live with less anxiety. If the darn thing is causing anxiety, sell it.

missile

It seems your ex home is not an investment rather it is a liability.

I note house belongs to partner, is there another reason why he might not want to sell?

slopemaster

jimjames wrote: »

I disagree with this - alternatives are available but they are not risk free.
You can get up to 5% on equity income funds which should keep pace with inflation long term.

You are right; when I said "hard to find anything that keeps up with inflation", I was thinking of savings accounts

slopemaster

Just to play devil's advocate here:
The theory of why it's worth investing in mortgaged property even if it doesn't bring you anything in the short term, is that in the long term your property will go up in value in line with inflation, whereas your debt will be eroded away by inflation.

Say you have a property worth 100 000 with a 50 000 mortgage.
Say in 10 or 15 years that property is worth 200 000.
Even if you've only paid the interest off the mortgage and no capital, the debt is still
50 000 - which is now only a quarter of the value of the house instead of half. So you've made money.

However, I do agree with those who are saying that if you're going to do this you need to be able to cope with dunstonh's scenarios, and that if it's stressing you out, just sell and put the money in ISAs, or even in a pension or something

poppy10_2

samredleaves wrote: »

The mortgage on the property is from when I lived there 2006 and I have the same tracker mortgage, the bank let me rent the flat as I needed to move as I had a child and couldn't sell, they gave me an agreement but that only lasted a year and now I think they are just ignoring/forgotten

You need to check whether you still have valid consent to lease, yo ucould be violating the terms of your mortgage agreement if you are renting it out without permission.

Colin297

This is the problem with owning properties when you can't afford it.

IMO rental properties are some of the best investments you can make. You buy it via mortgage and get it paid via rent.

Imagine taking a loan, getting it repaid by a third party, and then at the end of that you own the house which has likely went up in value significantly and still holds good rental value.

Almost perfect.

The challenges, however, are the ones you have outlined. When you don't have tenants, when you have problems with tenants etc.

You saying you "only" make a £40 profit a month tells me you don't really understand the fact that rent is paying your mortgage, to your property which you own. Getting 100% of your monthly repayment paid by rent is terrific and most investors a few years ago were happy aslong as a decent contribution was made.

To be honest - I think anyone who buys a rental property like this, MUST have this element of risk factored in. That means, having a contingency of cash buffer (e.g. 6-12 months repayments) or simply having the means to make the repayments indefinitely should things go wrong.

In your position I would try very hard to get tenants in. I'm sure you will be able to. After that, do as above - build an emergency fund to take the pressure off.

If you can't get tenants and there's clearly a problem here - maybe your property isn't a great rental investment. If feasible, you could look about selling and buying another more rentable one. Although, i appreciate this sounds unfeasible to you.

Mojisola

Assuming you're not married (as you use DP), you are in a very vulnerable position living in DP's house. Read through this - https://www.advicenow.org.uk/living-together/ - before you sell your property or make sure you keep anything you make from the sale in savings in your name in case you ever need to find another home for yourself.