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To continue renting or buy a second second home?
Redtoothfairy
Posts: 3 Newbie
Hi there, I am a newbie and looking for some help and advice!
We brought our house for £123k in 2011, we now believe it to be worth around £150k. We have been renting this house for the past 2.5 years for £595 PCM, due to work commitments we had to move shortly after buying that house to a different city and have been here ever since renting (paying £650 PCM).
I have a three year contract with my current job and now we are not sure whether to:
1- Sell our rented property, use the money made for a deposit and buy where we are now
2- Continue to rent out the property, release equity (around £15-17k) and use our little savings (£5k) to buy a second property
3- Continue to rent our house and rent where we are now for the next three years, with a view to save for the next three years and then buy our second property
Any advice would be greatly appreciated, as we genuinely do not know what to do.
Thanks!
We brought our house for £123k in 2011, we now believe it to be worth around £150k. We have been renting this house for the past 2.5 years for £595 PCM, due to work commitments we had to move shortly after buying that house to a different city and have been here ever since renting (paying £650 PCM).
I have a three year contract with my current job and now we are not sure whether to:
1- Sell our rented property, use the money made for a deposit and buy where we are now
2- Continue to rent out the property, release equity (around £15-17k) and use our little savings (£5k) to buy a second property
3- Continue to rent our house and rent where we are now for the next three years, with a view to save for the next three years and then buy our second property
Any advice would be greatly appreciated, as we genuinely do not know what to do.
Thanks!
0
Comments
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Can you afford if you have no tenant at property 1?0
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ConveyancingPro- that would be the dream! Yes I agree, option 1 is the least stressful but possibly not the best financially.
Cisco001- No, we probably couldn't afford two mortgages if we didn't have a tenant in property one. We've had the same tenant from the beginning though and they are unlikely to move in the next few years due to children being at local schools etc.0 -
As you are the landlord you are LETTING the property not renting it. Do you have consent to let from your mortgage lender?
You don't say how much of a mortgage you have on the property you let. You could potentially release equity (up to 75% LTV) using a Let to Buy mortgage. The rent you collect would also have to be at least 125% of the mortgage repayments.0 -
Pixie- Thank you for the clarification! Yes, of course we have written permission. That was done when we changed the mortgage to a BTL one.
We only put down a 10% deposit on the £123k house.
After speaking with the bank they advised us we could get £15-17k from our house now.0
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