Should i sell up or re rent? Advice greatly appreciated!

Baileyuk

Hi guys,
I wondered if i could seek advice from you all!?

I currently have a btl property that i have owned since 2006. I bought it for 108000 I have rented it since 2010 previously living in it. My mortgage is approx 65000 and its worth is approx 110000. I have 16 years left on the mortgage. I rent the property for 525 pcm my mortgage is 480 pcm.

I also own my own home which is worth approx 146000 and we owe 117000 and have 22 years mortgage remaining.

My tennant has recently given her notice and im debating re renting my first property or putting it up for sale and releasing the equity, and using the majority of this money to pay off a chunk of my resedential mortgage.
I'm unsure which is the better option at this time?

Selling pros = no more hassle worry of tenants. No further risk of market changing. Mainteance of property no longer needed. Reduce term of own mortgage. Some spare hopefully to save.

Re renting pros= Mortgage is starting to make a small profit and this will likely rise as equity increases. Long term investment for future eg pass to my son or use as pension top up.
The property is rentable and usually has a good deal of interest.

I'm really torn, so any opinions would be really helpful!
Thanks!

Pixie5740

What sort of mortgage do you have on the BTL property? Repayment or interest only? What kind of property is the BTL? Freehold or leasehold? If leasehold how many years are left on the lease?

Baileyuk

Hi! Thanks for the swift reply!

It's a repayment mortgage which is fixed until october this year.
It's freehold property.

AnotherJoe

Selling pros = no more hassle worry of tenants, no tenants taking months to evict and not paying rent. No further risk of market changing. Maintenance of property no longer needed including no big bills in future wiping out any small profit. Reduce term of own mortgage. Some spare hopefully some to save into pension right now.

Took your points and added a few. They would all sway me.

Baileyuk

Some very thought provoking points thankyou.
I have been very lucky so far and 3 very good tenants.
Regarding saving now though, with intrest rates how they are is this an option?

Pixie5740

If you used a mix of savings accounts, or current accounts with high interest rates, then you could easily achieve 3-6% returns doing diddly squat. Then again you don't have to invest all your money in cash, you could diversify into other investments whilst keeping some cash in savings accounts. Then you might do better that the return you're getting on the rental property. £2k in 10 years isn't a huge amount of capital gain and a 5% rental yield is ok, but not great.

Personally I'd like to have a smaller or better still no mortgage for the roof over my head and a mix of investments that are more liquid than property where I'm not responsible for someone else's home.

Baileyuk

Hmm thankyou you are swaying my thinking as was leaning towards re renting.
I realise the profit is poor atm but was thinking in the longer term that this will increase once the mortgage is paid/reduced.
I also feel like I've come this far maybe i should see it out!
But your points about liquid investment and not being responsible for another home is making me think!