Rent out, sell up head going to pop

rockdude82

Not sure which is the right think to do rent out or sell up, bought my house in 2008 for 115k have 97k left to pay on it, with 18k equity if I sell up some of that equity will be used probably to pay estate agent fees and solicitor fees, then I will have to look for another house and pay more solicitor fees and get surveyor in etc, thats on new place if I was to buy, probably leaving me with not much money to buy anywhere else anyway probably Less than what I started with all those years ago to try and save up for a deposit

I have had my house valued the other day and was valued at 115k so buyers usually always put an offer lower than the asking price anyway so that would be another loss out of my equity.

If I rent my house out the rent wouldn't cover the mortgage shortfall of about £70 £80 pound, so can I reduce my monthly payments if I was to save up about 10k and pay the 10k of my mortgage leavin me 87k left to pay rather than 97k would I be able to reduce my monthly payments this way?

Situation is Me and my girlfriend want to live together but really I need to move into her place as she won't live at mine and it would be really cheap to live in her place even if I had to pay that 70 £80 pound shortfall I would still be financially better off than what I am now and would save a lot more money to get a bigger place in future.

I have also been told i can have consent to let.

BitterAndTwisted

Just sell the damned place and be done with it

[Deleted User]

Landlording can be expensive, do you have the capital to cope with a delinquent tenant (there's a thread from a few days ago with a landlord that has tenants who haven't paid and won't pay for a few months, leaving him penniless and unable to pay his mortgage)? Renting out a property can be a good long term investment if you approach it properly, although for most people you'd be much better getting rid of the property and aggressively saving your earnings.

What BitterAndTwisted said is probably the best idea.

Werdnal

Yes, you do need consent to let from lender - they may up the payments, charge set-up fee, annual renewal fee and dictate who you let to, how much rent you must charge etc. They may also refuse.

Then you need to comply with a whole raft of legal requirements of letting a property, read this:

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

There are costs involved; annual gas safety checks, your insurance would need to change to LL policy, you may have agency fees etc. Then you need to attend to repairs quickly, maintain the property well and cover lost rent through gaps in letting or badly paying tenants.

You may think you only have to find the mortgage shortfall every month, but there may be far more expense that you realise - letting is never guaranteed income!

If your g/f already has a place for your to move to, why are you thinking of selling to buy somewhere else - why no just sell and move in with her until you can afford to buy a place together?

BitterAndTwisted

It doesn't matter that the proposed rent won't cover the mortgage payments: there could still be income-tax to pay on it.

Being a landlord is rarely a money-spinner in the short-to-medium term: it's the long-tern increase in equity you're looking at.

Please be aware that Consent-To-Let is not open-ended, and after a couple of years your lender could insist that you convert to a BTL mortgage which requires 25% equity and that the rental-income be 125% of the mortgage-payments which you won't qualify for today, so you could just be prolonging the agony.