Two properties what to do?

Stbridig

Just wondered what advice you have for us.
We own a flat outright in a very unfashionable part of East london probably worth currently about 180,000. We rent it out for £800 per month but after tax, letting agent fees and endless repairs we really don't take much more than £600 or so per month.
The house we live in is probably woth about £900,000 with a big mortgage of 250,000
So I am keen to sell the flat especially if a property crash is imminent and pay ff a chunk of our mortgage my husband thinks we should hold on to the flat and keep chipping away at the mortgage.
We are in our early to mid 50 s so need to try and sort ourselves out I think.

theartfullodger

Get a toy-boy and live a little ...

marksoton

Of course you do. Sell.

Stbridig

He's quite nice really
Think I'd struggle to attract any toy boys tbh

frugalsmurf

Is a property crash imminent!? If so, there's your answer.

marksoton

You sound like a lovely couple.

I'm so glad i left......

AnotherJoe

If you believe a property crash is imminent you should sell the £900k house and go and live in the £180k flat, so your thinking makes no sense.

OTOH what makes you think you are so all seeing you know a property crash is imminent ? Do you have a record of such prescience ? I'd hazard a guess not because otherwise you'd own multiple £900k properties without mortgages.

By all means pay off your mortage and get rid of the hassle of BTL but don't do it because you think you are a financial whizz kid.

Stbridig

Oh dear I'm really sorry if I came across as if I thought i knew anything at all about the property market.
I just saw some recent stuff about new builds not selling etc and put 2and2 together coming up with 5 or more!!
We inherited the flat when my in laws died.
I was really only asking for advise from people who are more clued up than me

AnotherJoe

Stbridig wrote: »

Oh dear I'm really sorry if I came across as if I thought i knew anything at all about the property market.

What does this sound like "I am keen to sell the flat especially if a property crash is imminent".
Other than someone who thinks a property crash is imminent ?

So, seems like you got lumbered with the flat, you perhaps haven't yet endured the full hassle of being a landlord if its a recent inheritance, so why not make life simple , pay a large chunk off the house mortgage?

No need to justify by conjuring up property crashes. (And I was serious, if you think one is imminent then selling your big house is the sensible thing to do). If you have no clue (as neither does anyone else here including me) then just enjoy your nice house with a smaller mortgage and no landlord worries. I breathed a big sighhhhhhh of relief when i did my final self assesment that included my BTL last year.

Davesnave

Stbridig wrote: »

Oh dear I'm really sorry if I came across as if I thought i knew anything at all about the property market.

Not to me, you didn't, but sometimes people see things that aren't there....

Your post lacked the confidence of a true speculator.

getmore4less

Stbridig wrote: »

Oh dear I'm really sorry if I came across as if I thought i knew anything at all about the property market.
I just saw some recent stuff about new builds not selling etc and put 2and2 together coming up with 5 or more!!
We inherited the flat when my in laws died.
I was really only asking for advise from people who are more clued up than me

where are these new builds that are are not selling?

Are they relevant to the location of your property.
Any developments local?

You say yourself the area is less desirable so probably not hyped up.
Other areas that have the "popular" premium maybe maxed out and ready for an adjustment especially if you add new build premium on top they will be the first to suffer.

If anything it is a sign that perhaps people are looking for better value which starts a ripple out of peak locations.

Look at the numbers

What's you mortgage rate?

Is the rental covering the interest on the equivalent debt you carry.

If you could clear £180k after fees then the £800pm is a gross yield of 5.33% nothing great but OK,

£600pm is 4% that covers most mortgage rates but then you have the tax to consider if you have not managed to structure your debt to get the relief.

The place is probably neutral/small loss on cash flow and servicing interest on £180k debt.

If the net from selling is less than £180k then the numbers look a bit better.

As long as there are no major repairs looming and you have a decent tenant I would probably let it run on but have selling in the back of your mind next time you need to change tenants.

Anything you can do to increase rent or reduce costs will help.