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To sell or to rent it out?
headintheclouds
Posts: 196 Forumite
Hi, hope some of you might be able to share your wisdom and offer some advice.
I have a 2-bed terraced house (circa 1985), worth about £125000. I have a mortgage of about £35000 on it, with about 10 years left - about £400 a month in payments because I changed from interest-only a few years ago. I'm buying a new-build property for which I can pay cash, thanks to an inheritance. There won't be any spare cash after that but I can pay for the house, the tax, solicitor's fees etc.
This is my dilemma: should I sell off my current house, paying off the mortgage and investing the cash, or should I consider renting it out, as various friends have suggested? I've got a while to consider it as the new-build won't be finished till the end of September. 2-bed properties in my area seem to be around £525 - £550 per month on the rental market at the moment and several houses in my road are rented out. They don't seem to stay empty for long.
What are the advantages and what are the pitfalls?
Hope some of you can help.
With thanks ...
I have a 2-bed terraced house (circa 1985), worth about £125000. I have a mortgage of about £35000 on it, with about 10 years left - about £400 a month in payments because I changed from interest-only a few years ago. I'm buying a new-build property for which I can pay cash, thanks to an inheritance. There won't be any spare cash after that but I can pay for the house, the tax, solicitor's fees etc.
This is my dilemma: should I sell off my current house, paying off the mortgage and investing the cash, or should I consider renting it out, as various friends have suggested? I've got a while to consider it as the new-build won't be finished till the end of September. 2-bed properties in my area seem to be around £525 - £550 per month on the rental market at the moment and several houses in my road are rented out. They don't seem to stay empty for long.
What are the advantages and what are the pitfalls?
Hope some of you can help.
With thanks ...
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Comments
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PItfalls are many - it depends whether you can be bothered.
Pitfalls include
a raft of legislation you need to comply with
what if the tenants dont pay - you have to pay running costs
what about the weeks/ month you dont have tenants - you have to pay
maintainence - you have to pay
letting agents fees- advisable if you are new to letting
mortgage can go up - you have to bear this out
when you sell it you may have to pay capital gains tax to the IR.
the only advantage I can see is that you "might" make 125 a month- out of this you'll have to pay maintainence, voids and your letting agents fees.
If you cashed in youd realise somewhere in the region of 90 grand which even if you put in a bog standard savings account, youd be looking to make at least 350 a month. As you dont need the money, you could be looking at better performing bonds and so forth.
Honestly? For what you'd make Id sell it.:beer: Well aint funny how its the little things in life that mean the most? Not where you live, the car you drive or the price tag on your clothes.
Theres no dollar sign on piece of mind
This Ive come to know...
So if you agree have a drink with me, raise your glasses for a toast :beer:0 -
headintheclouds wrote: »
There won't be any spare cash after that but I can pay for the house, the tax, solicitor's fees etc.
If it was me I would sell, enjoy my new house ( and being debt free) and live a little.
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