Quandary!..Should I sell my house or rent it out?

steffyoak

Hi - could do with some advice of opinions please as I'm getting myself in a muddle over my current situation...

Without going into all the gory details my current situation is that I have a mortgage & secured second loan on my house both of which have suspended possession orders registered in favour of the lenders. I currently pay monthly cms plus extra under an arrangement & in total the outlay is about £1200 pm. Our household income has dropped significantly in last couple of years & we only just manage to cover all the bills each month - major stress!

We have an opportunity to potentially relocate abroad (something we've been longing to do for a long time) where our monthly outlay will be very minimal - just utility/personal costs, no actual rent. We would still be earning. My quandary is whether to let the house or just sell it.

Based on the potential rental income I've been quoted (net of fees)
I would still have about £500 pm to make up as a shortfall towards the mtge & loan each month

I don't know what to do for the best. I've never let a property before & part of me isn't keen on having to still pay a monthly shortfall as well as be responsible for any future maintenance costs on the house which due to its age will undoubtedly crop up. The prospect of no longer having the constant stress of worrying about both of the secured mortgages is very appealing. The down side would be that if I redeemed my mortgage I'd be unlikely to get another one in future as my credit history is poor - so should I stick with it in case I want to move back to UK & buy another house in future??

Thanks in advance

dancingfairy

What could you do with the 500 instead? Presumably you could save it up for another deposit if needs be?
The problems with renting is:
1) you will need an agent or someone in the uk to take care of things for you.
2) you will need to make sure you have all the legals covered - permission from the mortgage company, gas safety certificate, deposit protected etc.
3)Do you have a contingency fund for any repair work?

I think there are too many pitfalls in renting (especially for a newbie landlord from abroad) if you're hearts not in it.
It doesn't sound like there are many (if any) benefits to continue owning this property unless you plan to come back to it soon? Even then it will still be a millstone around your neck.
df

RAS

Your credit history is repairable. Defaults etc fall off the record in 6 years. It is much much more difficult to get round repossession.

Do you have enough money in the kitty to cover the mortgage and arrears if the tenant proves to be a nightmare. That means enough to cover 6 month's rent whilst you get them out, court costs and the cost of getting the place renovated to the standard that would allow it to be sold or rented out out again?

If not, you would be much better cutting your losses and selling up if your secure lenders will allow that.

steffyoak

Thanks both - to answer points raised...
The £500 saved would literally be just that...saved!

Yes, was planning on using an agent precisely because we would be abroad & therefore impossible to manage remotely. We don'y have enough of a cash float to cover ourselves for any major problems i.e.boiler blows up or tenant doesn't pay (although agent said there was an insurance policy for that)

Also, we felt that whilst there would be some initial (small) outlay on our part to get the house looking ready for market it would be literally a one off cost & not ongoing if we were renting. Plus....if we did move back to UK, we wouldn't move back to this particular house anyway - we would move further south.

Interesting comment about the defaults/repair to credit file - I would definitely look to tidy up my other finances i.e. credit card defaults whilst I was away - or maybe just stay out of the country for 7 years!!!

franklee

You will need consent to let from your lender which in your circumstances they may not give. I doube they'd be wanting to chase you for money once you disappear abroad and they will want to be sure the mortgage is going to be paid. You will also be putting your tenants in a difficult position should a repossession go ahead.

xylophone

In your position I think I'd sell, go abroad to work, save as much of the salary as possible, and "cut my coat according to my cloth" with regard to house purchase on return to the UK.

steffyoak

franklee wrote: »

You will need consent to let from your lender which in your circumstances they may not give. I doube they'd be wanting to chase you for money once you disappear abroad and they will want to be sure the mortgage is going to be paid. You will also be putting your tenants in a difficult position should a repossession go ahead.

I have approached them verbally for an indicative view on consent & they said yes...albeit I know I would have to submit formal apln etc..so not guaranteed

G_M

I doubt you will get CTL in the circumstances.

So you'll need a BTL mortgage. How much equity if any is there in the property?

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steffyoak

G_M wrote: »

I doubt you will get CTL in the circumstances.

So you'll need a BTL mortgage. How much equity if any is there in the property?

[FONT=&quot]New Landlords[/FONT][FONT=&quot] (information for new or prospective landlords)[/FONT]
[FONT=&quot]Letting Agents [/FONT][FONT=&quot](Tips for selecting, and tips for sacking them)[/FONT]

about £40k valn approx £220k