Which option is best re: flat we own

Sapphire.

I've owned my 1 bed flat in London for 3 years. The plan was to put it on the market in 6-12 months and then relocate to near my parents in Berkshire, buying a 3 bed house to start a family.

My mum has just announced she's moving overseas for a year and would be happy for us to live in her house rent free while she's gone.

So, we have 3 options:
1. Put the flat on the market asap, when sold put the equity in the bank and then save for a year while living rent free in mum's house before buying when she returns.
2. Rent our flat out for a year and save while at mum's.
3. Leave our house empty and save while at mum's.

Our flat is in zone 3, prices in the local area are rising around 5-10% per year and there's around 55k equity in our property assuming we sell it for the price we bought it.

phill99

Option 2 will result in a tax liability and costs associated with letting such as letting agents fees etc. therefore you are unlikely to save much from the rent you generate. You will also have the problem of getting rid of your tenant and the costs associated.

Option 3 means that you are still paying a mortgage plus council tax, service charge etc so again will not save as much as possible.

Option 1 has to be the not realistic.

You will have cash in the bank, plus you will be able to save the money you normally spend on mortgage plus any more you can save. Then when mum returns you will have a much bigger deposit, plus be in the area you want to live and know the good areas, good schools (if you are thinking that far ahead) etc.

tim123456789

I think P99 making it sound worse that it is.

the chances of you getting a tenant who is difficult to move is slim. Just be upfront that it is only available for a year. There are lots of people, especially in London, who are only looking for a fixed term of one year.

As to the costs, these are going to be small in comparison to the expected rent and you'll still come out several thousand ahead.

One piece of advice, don't leave any fixture and fittings that you regretting losing, in the property. Even the best of tenants have accidents and break things

tim

G_M

This may help you decide:

New Landlords (information for new or prospective landlords)

Sapphire.

Hmm had a good read of that and a chat to my fiance and it does seem more hassle than it's worth...

Fraise

I would rent it out, even with tax and agent fees you'll still be quids in at the end of the year, plus, it looks very much like property in London and the south east are going to rise even more by next year, so you will gain on the extra equity too.

BitterAndTwisted

Many leases preclude being able to let.

If you're not going to move back in at any point in the future I can't think of one good reason why you shouldn't sell now and be done with it. Becoming landlords is not purely sitting back and raking in the rent. Spend a short time of this part of the forum to see the absolute messes some newby landlords can find themselves in. And have that compounded by their emotional attachement to what was once their lovely homes.

Leave being landlords to those who have had this as their long-term investment-strategy.

ValHaller

I would do 1. It puts you in a lovely chain free position for selling and for buying. You don't need to rush, you are not under pressure to sell low to buy the one you really want.You are not under pressure to buy high because you have a twitchy buyer.

While you are selling you can stay in the flat in the week and go to mum's place for the weekend

grifferz

Absolutely, #1 every time. Stress-free (as possible) sale with a vacant property, no need to live in it while marketing it, no tenant to get rid of before you can market it, then cash in the bank to earn interest while you stay somewhere for free.

junglejim2

then cash in the bank to earn interest while you stay somewhere for free.

Problem is bank interest is paltry, your money is losing value all the time.

Renting for me would be the answer.

thelem

I'd sell it now - you don't know how long it will take to sell and if it ends up taking a while it could mean you're forced to delay your next purchase. It'll be much nicer looking for a property with cash in the bank rather than dependant on another sale.