Wanting to Sell But Should I?!

Mercurial

Hi,

Have been thinking for some time to put my flat on the market and as there is always great advice on here thought I would ask for opinions.

The flat is located in Greater Manchester and I purchased it back in 2005 for 93K. Here is a link to a similar property to mine in the same block on for offers over 79,950 which I believe is over priced in the current market

http://www.rightmove.co.uk/property-for-sale/property-26665497.html

I don't have a mortgage and I have never had a problem letting it out. Ideally I would like to sell it was valued two years ago at 72K

Pros

Beautiful building
High ceilings
Good transport links into Manchester
Nice neighbourhood
Good views it is front of building, top floor with plenty of light
Property never left empty average time to find tenants is a week
Cons


Service charge and ground rent for 12 months is nearly 2K
Small flat with small bedroom, bathroom and kitchen need upgrading

There is around 108 years left on the lease.

So should I put on market as is or replace the kitchen and bathroom or continue to rent out in the hope prices go up?

Do you think 70 to 72K is a fair amount to ask I wouldn't like to go much lower than this.

Thanks!

Pixie5740

Do you live in the property or is it a BTL?

Mercurial

I rent it as I am working overseas at the moment. I will never move back there to live.

dimbo61

So much information and yet so little !
How much does it rent for each month, Landlord costs ?
Why do you want to sell.
Income, negative equity ? Retirement plans ?
We know nothing at all about you ! Age, income, savings, family, location. The building looks beautiful but may cost a fortune to maintain.
The flat in the advert looks dated and needs new bathroom and kitchen so is yours the same ?

Mercurial

dimbo 61 thanks

I am 42 have another property in the East Midlands which will be my main home and have no mortgage on that. Am single, well paying job but that will probably change when I move back to the UK in 4 years time , no pension but good amount of savings.

Flat rents for 425 pcm and after LA fees I receive 356 pcm. I want to sell as service charges are so high and will never live there. Yes my kitchen and bathroom need updating.

dimbo61

As a long term investment do the figures add up.
Rental return to you of £4200 a year and service charge of £2000 plus needs investment with new kitchen and bathroom.
House prices in the north west are steady not 10/15% a year like London.
Not making much from being a Landlord !

Mercurial

Thanks I purchased it to be my home and rented it out whilst I was overseas now things have changed I know I will never live there. I am hoping someone would fall in love with the flat to make their home as a BTL it's not much of an investment.

AlexMac

If it was me I'd be tempted to sell, in that £2k pa is a fairly fierce annual service-charge, and it will cost you £5-10k to refurbish it, so you'll struggle to make a profit in the next couple of years on it as a BTL. On the other hand, assuming you're getting £450-£550 pm/£5.5-6.5k pa rent on it, that's not a bad gross % return on the investment (before taking account of annual service charge and any agent management fees which I assume therefore reduce your taxable profit down to £2-3k pa). So sticking with it would also not be a bad idea... especially if there was a propsect of long-term capital gain. But, I'm surprised to see that (according to Zoopla value trends for your flat 5 and the postcode) that values have been flat for several years, so maybe you should bail out now. 108 years on the lease is perfectly sellable whereas in 25 years time it would reach the problematic 80-83 years when it will put buyers off. Also, does the £2k pa cover a big repairs sinking fund, as if not, you'll face big one-off re-roofing / scaffolding / external decor bills eventually?
Put it another way; if you wanted to make money out of a BTL and had £70k to play with, would you buy this flat? I probably wouldn't. But what a nice dillemma

Mercurial

AlexMac thanks some great points. Yes, the area has been pretty stagnant and the service charges continue to rise each year though we do have a sinking fund. I am back home in September and will try to sell.

eddddy

Mercurial wrote: »

So should I put on market as is or replace the kitchen and bathroom or continue to rent out in the hope prices go up?

Hi Mercurial

I guess this is a pure investment/business decision - so I think the first question to think about is "what would you do with the money instead?"....

Buy another BTL property?
Invest in the stock market?
Put it in a savings account?
Put it in a managed pension fund?
...

You need to consider whether a different investment will give you a higher return (and/or better suits your appetite for risk and/or your appetite for 'hassle'.).

Obviously, if you sell and then buy another BTL, for example, you need to factor in EA fees, legal fees, loss of rent during the selling/buying process etc.

Mercurial

Hi Eddddy,

Thanks I would probably invest in the stock market certainly wouldn't buy another property.

I have asked to get a valuation on the property and will try to sell.