Sell or rent out?

joerugby

booksurr wrote: »

you have already shown that you are aware that the return on money invested in property is (currently and hopefully) greater than the return obtainable on that money invested elsewhere

Are you sure this is the case?

My two favourite equity income funds (Invesco Perpetual Income and High Income) have increased in value by 50% over the past five years and in addition they have paid me an income, net of basic rate tax, of around 4% per annum.

My house has barely changed in value over the same period.

What is the make up of your overall investment portfolio? Is it well balanced? Or is it highly weighted towards uk residential property? If so, do you think it's wise to have all your eggs in that one basket?

Could I suggest you also post your question on the Savings and Investments board where I suspect you will get some interesting comments

seven-day-weekend

Thanks to all, we have pretty much decided to sell. Thanks for all your advice.

seven-day-weekend

joerugby wrote: »

Are you sure this is the case?

My two favourite equity income funds (Invesco Perpetual Income and High Income) have increased in value by 50% over the past five years and in addition they have paid me an income, net of basic rate tax, of around 4% per annum.

My house has barely changed in value over the same period.

What is the make up of your overall investment portfolio? Is it well balanced? Or is it highly weighted towards uk residential property? If so, do you think it's wise to have all your eggs in that one basket?

Could I suggest you also post your question on the Savings and Investments board where I suspect you will get some interesting comments

We haven't really had an investment portfolio before...just savings in ISAs and Premium Bonds and our house.

missbiggles1

SuzieSue wrote: »

It won't make a difference as if the person you sell to is connected to you (there is a definition on the HMRC website of what a connected person is) then the sale is considered to be made at market value so CGT will be payable.

I was thinking of affordability rather than tax.

Tassotti

seven-day-weekend wrote: »

Thanks to all, we have pretty much decided to sell. Thanks for all your advice.

Think you will regret that decision.

lessonlearned

seven-day-weekend wrote: »

Thanks to all, we have pretty much decided to sell. Thanks for all your advice.

Knowing what I know now I would have never sold one single property that I have owned - I would have kept the lot and rented them out.......

I am currently in the process of property hunting. Like you I have a lump sum of capital which is languishing in the bank paying me a pitiful interest - despite me switching accounts and "milking" the accounts for all they are worth. I have a couple of private pensions as well as my state pensions.

However, Unlike you I am now a widow and have sold the family home which held all my memories and sentimental attachments.

My intention now is to buy as many properties as I can with the funds I have, one to live in and then at least two to provide rental income to boost my pension income, the principal residence will have a small residential mortgage on capital repayment and the two rentals will be on BTL mortgages.

I intend to run this seriously as a business and will have no sentimental attachment to any of the properties, not even my primary residence. This is purely business. At some point I will probably move again into a different principal primary residence, converting the residential mortgage to another BTL.

I have already provided each of my children with deposits on their own properties so I don't have to worry about their "Inheritance".

My kids will inherit the rental properties all in good time and they will be happy enough to pay any CGT due.

Who knows if I make enough, there might even be some IHT to pay one day......:rotfl::rotfl:

Re stocks and shares etc.... I know little about investing in these but I may have a little "flutter" once I have purchased my properties if there is enough left in the pot, after I leave a sufficient contingency fund to cover voids, repairs etc. I will take advice on that though nearer the time.

SDW there is nothing to,stop you selling your family home and then reinvesting the proceeds in a couple of BTLs. This way you get to eat your cake and keep it too.

The new properties will just be "rent machines" and you will have no worries about sentimental attachment. Take out landlord insurance to cover voids and damage, and just make sure you have a contingency fund to cover any emergencies.

If you don't want the hassle of being a hands on landlord, then employ an agent to act on your behalf, the fees are tax deductible.

SuzieSue

lessonlearned wrote: »

Knowing what I know now I would have never sold one single property that I have owned - I would have kept the lot and rented them out.......

I am currently in the process of property hunting. Like you I have a lump sum of capital which is languishing in the bank paying me a pitiful interest - despite me switching accounts and "milking" the accounts for all they are worth. I have a couple of private pensions as well as my state pensions.

However, Unlike you I am now a widow and have sold the family home which held all my memories and sentimental attachments.

My intention now is to buy as many properties as I can with the funds I have, one to live in and then at least two to provide rental income to boost my pension income, the principal residence will have a small residential mortgage on capital repayment and the two rentals will be on BTL mortgages.

I intend to run this seriously as a business and will have no sentimental attachment to any of the properties, not even my primary residence. This is purely business. At some point I will probably move again into a different principal primary residence, converting the residential mortgage to another BTL.

I have already provided each of my children with deposits on their own properties so I don't have to worry about their "Inheritance".

My kids will inherit the rental properties all in good time and they will be happy enough to pay any CGT due.

Who knows if I make enough, there might even be some IHT to pay one day......:rotfl::rotfl:

Re stocks and shares etc.... I know little about investing in these but I may have a little "flutter" once I have purchased my properties if there is enough left in the pot, after I leave a sufficient contingency fund to cover voids, repairs etc. I will take advice on that though nearer the time.

SDW there is nothing to,stop you selling your family home and then reinvesting the proceeds in a couple of BTLs. This way you get to eat your cake and keep it too.

The new properties will just be "rent machines" and you will have no worries about sentimental attachment. Take out landlord insurance to cover voids and damage, and just make sure you have a contingency fund to cover any emergencies.

If you don't want the hassle of being a hands on landlord, then employ an agent to act on your behalf, the fees are tax deductible.

That's fine and I agree that your plan is best for you. However, we don't know anything about the OP. They might have enough income from pensions and not need the rental income or the hassle of letting a property. They have already been a landlord and they know what it entails. We do not know how old they are. My husband is a landlord and I know that I would not want to be a landlord in my 70s or 80s no matter how financially advantageous it is. I want to be able to relax and enjoy my retirement.

seven-day-weekend

lessonlearned wrote: »

Knowing what I know now I would have never sold one single property that I have owned - I would have kept the lot and rented them out.......

I am currently in the process of property hunting. Like you I have a lump sum of capital which is languishing in the bank paying me a pitiful interest - despite me switching accounts and "milking" the accounts for all they are worth. I have a couple of private pensions as well as my state pensions.

However, Unlike you I am now a widow and have sold the family home which held all my memories and sentimental attachments.

My intention now is to buy as many properties as I can with the funds I have, one to live in and then at least two to provide rental income to boost my pension income, the principal residence will have a small residential mortgage on capital repayment and the two rentals will be on BTL mortgages.

I intend to run this seriously as a business and will have no sentimental attachment to any of the properties, not even my primary residence. This is purely business. At some point I will probably move again into a different principal primary residence, converting the residential mortgage to another BTL.

I have already provided each of my children with deposits on their own properties so I don't have to worry about their "Inheritance".

My kids will inherit the rental properties all in good time and they will be happy enough to pay any CGT due.

Who knows if I make enough, there might even be some IHT to pay one day......:rotfl::rotfl:

Re stocks and shares etc.... I know little about investing in these but I may have a little "flutter" once I have purchased my properties if there is enough left in the pot, after I leave a sufficient contingency fund to cover voids, repairs etc. I will take advice on that though nearer the time.

SDW there is nothing to,stop you selling your family home and then reinvesting the proceeds in a couple of BTLs. This way you get to eat your cake and keep it too.

The new properties will just be "rent machines" and you will have no worries about sentimental attachment. Take out landlord insurance to cover voids and damage, and just make sure you have a contingency fund to cover any emergencies.

If you don't want the hassle of being a hands on landlord, then employ an agent to act on your behalf, the fees are tax deductible.

This is what we are going to do actually It was the poster who said 'if you were looking for a rental property would you buy this one' who made us make our minds up. The answer would be no.. It requires too much maintenance and also has the emotional attachment.

We were thinking previously about buying a reasonably new property purely for rental purposes so this is what we are going to do. We have looked at several developments and have decided on several where we are willing to buy for investment purposes. All have good motorway links and/or are near local employment.

Thanks to all on the thread for helping us to clarify our thoughts.

seven-day-weekend

SuzieSue wrote: »

That's fine and I agree that your plan is best for you. However, we don't know anything about the OP. They might have enough income from pensions and not need the rental income or the hassle of letting a property. They have already been a landlord and they know what it entails. We do not know how old they are. My husband is a landlord and I know that I would not want to be a landlord in my 70s or 80s no matter how financially advantageous it is. I want to be able to relax and enjoy my retirement.

We don't particularly need the income, but it seems a better investment than having the money sitting in the bank. We are not brave enough to invest much in stocks and shares. We are 65 and 66 and both have decent Pension income. However, if one of us is left on our own, our income will fall and this will be a bit of extra income, or we could sell it and realise the capital.

lessonlearned

I have been "virtual friends" with SDW for some time now so,I,do know a little about her circumstances which is why I feel able to discuss the issues with her. SDW has been incredibly supportive to me in the past, and although we have not met in RL I consider her a good friend.

Like me SDW and her husband are both "young (ish);) retirees", in reasonably good health and still pretty active. Like me they have owned a property in Spain, like me they have taken steps to ensure that their child has managed to,get onto the property ladder, and like me, although they do have pensions and are comfortable enough, they are not "rich beyond the dreams of avarice":rotfl:

Obviously there the similarities end, because unfortunately I lost my husband few months ago.

However, I can very much appreciate that renting out a much loved family home is never going to be easy. It was bad enough selling mine and seeing my beautiful garden fall into rack and ruin .......still it's none of my business now. The new owners are free to do as they please.

I merely outlined a scenario which could work for SDW and her husband, that they saved them the heartache of seeing their much lived family home fall into uncaring hands and yet still finding a way to provide income and lomg term capital growth.

There is absolutely no need for anyone to get too hands on as a landlord if they don't wish to get involved. There are plenty of foreign investors who simply buy a property and then rake in the profits without even setting foot in the UK. They certainly don't actively manage their proerties, they pay minions to do that......:rotfl:

I too want to be able to relax and enjoy my retirement, which is why I intend to invest some of my money in BTLs.

Why would I settle for a measly 2 to 3 per cent interest on my capital which doesn't even keep pace with inflation when I can realise double digit returns for just a little bit of effort