Torn between two ideas

Ollie345

Morning, I'm here to ask for your views on my future path. I am torn between two ideas relating to property and my finances in the future. I own one flat right now and I'm 35 and single.

The first idea is to stick with the one flat and pay it off within 5 years. End up with no mortgage and just bills to pay but no other income than from my wage

The second idea is to remortgage my flat and put the equity released into another flat. This means ongoing mortgages and managing a buy to let but creating an additional income to my wage and possible capital gain.

What would you recommend? I was put off option two slightly buy the stamp duty announcement but im not sure if it's just a vote winner and that capital gain long term will make it an irrelevance. Thanks to all replies.

Pixie5740

Option 3: Sell the current flat and buy a freehold property.

Out of your two options though I prefer number one.

ERICS_MUM

If you go with option one and repay your mortgage you would have more disposable income every month. Do you plan to invest it, for how long and how ?

buying a 2nd property (with a new mortgage) would effectively be investing that disposable income in a property. If you are looking for a long term (eg retirement) investment then I believe this is the best option. Rent to cover mortgage and all expenses.

Lord_Baltimore

Option 1.
Option 2 will sap your disposable with no heir to enjoy your hard work

glasgowdan

I agree with 3

bouicca21

Depends on how much you like your flat. Is it the sort of place that you want to live in long term? Is it big enough to adapt to changing circumstances, e.g. suddenly finding yourself no longer single?

What will you do with the extra income if you pay off the mortgage? Live riotously? Save it? Just enjoy life?

The answers to all these questions should help you decide between options 1 and 2. But as Pixie said, there is also option 3 - trade up to a larger property to be your long term home.

Ollie345

Well I didn't expect a third option but thanks, and that's an idea because my lease is about 65 years, however upon enquiry I can still re mortgage while it's 55 and above.

I don't particularly like my job and only do it for the money so this is why another income is appealing. My rental income would be more than double the mortgage.

Another part of me is attracted to a simple life with as little debt and financial hassle as possible which is what draws me to option one.

bouicca21

Cripes! 65 year lease? Option 4, renew it. And forget about options 1-3 until you do.

chelseablue

bouicca21 wrote: »

Cripes! 65 year lease? Option 4, renew it. And forget about options 1-3 until you do.

This option above

Pixie5740

Another vote for Option 4. The longer you leave it to extend the lease the more expensive it will get...at an exponential rate. Furthermore, whilst some lenders allow you to remortgage with a 55 year lease should you ever come to sell you'll either have to limit yourself to cash buyers only or be forced to extend the lease as part of the sale which would be costly.

Ollie345

The flat is ok for myself and a partner but probably not if I ever had a family.

If the mortgage was paid off I'd need less income so could work part time which is see as ideal as I have more time for myself to enjoy life.

Another option four, this lease would expire when / if I'm 100 years old I didn't think I had to worry about it just yet! If I chose option one then I wouldn't need to worry about the 55 year mortgage as it would be paid.