Landlords- Would you sell up or carry on?

Beckyy

I would like to get a take on my situation from other LLs.

We have 1 BTL, a small 1 bed house which was our previous home (Bought for £70K, valued at £75K). Was let out to a good tenant, however was flooded a couple of months ago leading to a mutual end of tenancy. Remedial works are ongoing and will be until the end of the year at the earliest. We have a big insurance claim from the flood damage and there is a chance the flooding may reoccur in very torrential weather as the solution to land drainage which caused it isn't necessarily resolved.

I'm now starting to wonder if it's worth the hassle for what we make from it. We have an IO mortgage (£46K) which is £150 per month, fixed for the next 4 years with 5% ERC.

The thought of looking for a new good tenant, whilst being paranoid about future problems, future insurance renewals etc. feels like a massive task and I'm questioning whether it's for us. I'm quite happy with the normal LL responsibilities but having this happen has throw me a lot with this property.

The house is also very close to where we live which is one sense is very handy but in another feels a little odd, and could potentially be a problem with the wrong tenant.

I don't know if we could sell the house after work but I'm very much considering trying. I'm not even sure how easily I'd find a tenant, especially if neighbouring properties still have very obvious building work going on - it would certainly put me off.

Any helpful replies or advice on how to proceed? Carry on letting or take a hit and try to sell up?

pinkshoes

Beckyy wrote: »

We have a big insurance claim from the flood damage and there is a chance the flooding may reoccur in very torrential weather as the solution to land drainage which caused it isn't necessarily resolved.

Depends if you can find a buyer now that such problems have been highlighted...

Is there anything you can do to the property to prevent flood water entering?

How likely is future torrential weather???

Pixie5740

What kind of yield are you getting letting out this property, taking into account these void periods? If you're not making a decent yield then sell the property (if you can) and invest your money elsewhere.

agrinnall

With your mortgage being only £150 per month then when the property is let presumably the yield is pretty good, so whether it's financially sound to continue to let really depends on how quickly you can get it re-let and what future void periods you might expect - how often might floods like the one you've had be expected?

Regarding selling, was the £75K valuation done with the knowledge of the flood risk?

Talc1234

If you did need to sell then auction it because we all know from Homes Under the Hammer no one ever reads the legal pack

AlexMac

If, as seems likely on a £70k property you enjoy a good yield, I would stick with it as a rental. Especially as you'd have to declare the flood risk, or likelihood toprospective buyers. Your statement'however, that finding a good tenant is a 'massive task' worries me that maybe you don't have the attitude or detachment to be a successful ll.

If it's any comfort, I started off almost accidentally as a ll, but in over 16 years and about ten tenants, have never ha a bad one. Use an agent to find and vet and set up an ast, even if you self manage.

Good luck

wolfplayer

Beckyy wrote: »

I'm now starting to wonder if it's worth the hassle for what we make from it. We have an IO mortgage (£46K) which is £150 per month, fixed for the next 4 years with 5% ERC.

The thought of looking for a new good tenant, whilst being paranoid about future problems, future insurance renewals etc. feels like a massive task and I'm questioning whether it's for us. I'm quite happy with the normal LL responsibilities but having this happen has throw me a lot with this property.

The house is also very close to where we live which is one sense is very handy but in another feels a little odd, and could potentially be a problem with the wrong tenant.

It sounds like a lot of anxiety and responsibility to me.

Take a read of this article Becky. Excuse some of his mucky descriptions, and just take in the upsides and downsides.

Is Becoming A Landlord Even Worth It?

What You Should Know Before YOU Become A Landlord…

20 Oct 2014

http://www.propertyinvestmentproject.co.uk/blog/become-landlord

Perhaps if this incident had occurred if you had gone on to have 2 BTLs, and therefore more debt to services, or voids, it could endanger your own position with having to pay 3 mortgages.

https://forums.moneysavingexpert.com/discussion/4655237

Beckyy

Thank you for the replies - just a brief visit online so I'll have a proper read of links etc. when I'm home.

We were getting £375pcm so not an amazing yield, could possibly get £400pcm now. Valuation was done at our remortgage last year, so not taking into account the flooding.

The concern RE: finding a new tenant is that many would run a mile at the thought of house which could potentially flood, especially when neighbouring houses will still be having big work done and have sandbags out every time the rain is heavy.

Flooding locally has happened twice since the actual flood, though not enough to cause the damage as before it was enough to cause a lot of stress. A solution is being looking into but nobody knows if/when it will be sorted.

agrinnall

I'd suggest you at least get an EA round to give you a selling valuation so that you have a better idea of what the house is now worth, which unless there has been a considerable general increase in property values in the area I can't believe will be anywhere near the £75K mark when the flooding history and future risk is taken into consideration.