Should we sell up ?

My_car_didnt_float

Hi all, forgot my user name and as my car died in the floods thought this would do :rolleyes:

Will try to keep it short

We have been with CCCS (:A ) for 2 years repaying £60k in debts and also have a mortgage worth £70k. Its been tough but with the help of this site and being strick with ourselves we are coping quite well and only have 9 years (debt) left to go

My plan ! (that I would appreciate your opinions on) is this:

Sell home :eek: pay off mortgage, pay off debts, purchase 2 bed house (to rent) and then rent ourselves (as there is 6 of us and need larger house)

On paper it seems a good idea, we would be no worse off monthly money wise and we would still have property for our future, retirement :eek:

What do you think :beer: Thanks

angelavdavis

Sounds good! What a relief getting rid of the debt will be and as you will have been used to living more frugally, hopefully you will be able to start building up some savings too!

Some things to bear in mind:

1) Be careful with tax when renting out. You are only allowed to claim tax relief on the mortgage interest - not the capital element.
2) Check that you won't incur charges for repaying the mortgage early.
3) Bear in mind the costs for maintenance, agency charges etc on the rented house.
4) Check that the market will sustain a 2 bed house. With the unfortunate events recently, I would have thought there would suddenly be a demand for rented accommodation while people are getting their houses straight.

I am sure you have thought of these, but thought I would put them forward in case!

Was your property affected in the flood? Reason I ask, is that if your property is in a flood plain, you might have issues trying to resell it.

Good luck!

My_car_didnt_float

angelavdavis wrote: »

Sounds good! What a relief getting rid of the debt will be

Thanks Angelavdavis that sums up the main reason for doing it

Those are good points you raised, was aware of tax as self employed so would add it to that.
Luckily home not effected by floods, just thought my big MPV could easily go through it after the mini ! Wrong :mad: and being MSE only had tpft as it was so old :rolleyes:

Anyone else good or baad to do this:beer:

izzybusy23

My_car_didnt_float wrote: »

angelavdavis wrote: »

Sounds good! What a relief getting rid of the debt will be

Thanks Angelavdavis that sums up the main reason for doing it

Those are good points you raised, was aware of tax as self employed so would add it to that.
Luckily home not effected by floods, just thought my big MPV could easily go through it after the mini ! Wrong :mad: and being MSE only had tpft as it was so old :rolleyes:

Anyone else good or baad to do this:beer:

Hi there

Sounds good in theory, but if interest rates rise again, can you afford to subsidise your tenants rent? I actually think that the buy to let will be saturated due to oversupply already and rents just cannot be put up in line with mortgages. If your rent will cover the mortgage and you have factored in more interest rises too, I can't see why your plan shouldn't work.

Look at the area first and see how much rental is available as if you are competing with many other landlords then you will have to lower your rents to pull in the tenants.

Good luck!

If you are living in Glos, you have my sympathy as I live there and still no running water, but thank god for having electricity now :T

My_car_didnt_float

Hi izzybusy23

Thanks for reply, sorry to hear about water must be a real pain :eek:

May be I wasn't clear in my first post, but after paying off debt and mortgage the remainder should just be enough to buy the small 2 bed property
Writing that i realise how lucky we are compared to others here however it would mean giving up our lovely 4 bed home and prob have to move more into town, something the kids would not be happy about

And in 17 years would have paid off mortgage and debt and own are current house out right ! is it such a no brainer

SUESMITH_2

depends where you buy, one of our friends who is a landlord in york is selling some of his properties off in york because he is getting smaller and smaller returns on his money.also you have to work out how long you might have with no tenants and how it would it impact financially.hope this is some help

My_car_didnt_float

Thanks sue :T

Its a good point as our rent would be supplemented by the income we would get from the property we rent out

Life is never easy :rolleyes: