Sell House and Rent for a while

Kenny4315

One thing about selling then renting is that is puts you as a cash buyer (or cash plus mortgage), ie no chain, a very strong position to be in when negioating the price, could save you more money than you pay in rent regardless of whether market goes up or down.

Pal

I also did this 9 months ago. I sold a 2 bed flat and now live in a 3 bed detached house that we are renting.

In some ways it is annoying that we can't make major changes to the house to correct things we don't like, but the rent we pay is less than the mortgage interest cost we would have had to pay had we moved to a similar house, when we factor in the post-tax interest we are earning on the equity. We also got to move straight away without hassle, decorated our old flat to sell it, and are now cash buyers for when we do eventually buy.

In terms of actual cash paid out, we are probably about even with where we would be if we had bought the same house, except that house prices where we are looking have fallen by about £10-£15k as the market has softened, which is a notional profit that we may or may not be able to take advantage of at a later date.

I still think that house price falls are more likely than rises for the forseeable future, so am in no rush to get back onto the housing ladder. Of course it may ultimately turn out to be a mistake, but if house prices start rising again then I am in a very strong position to buy, being a FTB with nothing to sell, looking at properties that are going to be out of the range of most other FTBs (as it is our second home).

mrcow

Kenny4315 wrote:

One thing about selling then renting is that is puts you as a cash buyer (or cash plus mortgage), ie no chain, a very strong position to be in when negioating the price, could save you more money than you pay in rent regardless of whether market goes up or down.

That's very true.

I think it depends on your overall outlook. I personally wouldn't consider it as I know a couple who ended up losing everything trying this out about two and half years ago (including losing each other in the end!), but they were incredibly naive about the market, taking advice from 'experts', not thinking it through for themselves and ended up renting a house that was drastically beyond their means.

The lectures I've heard from them about how being a homeowner was a mug's game etc :rolleyes: would make your head spin. (One of the reasons why I'm constantly rolling my eyes whilst reading threads on this board about market downturns etc! as I've heard it all before) And they've now practically lost all of the £60k odd equity that they had in their bank.

All I'd say is, if you are coming out of the market, please ensure that you play it smart!