Need some clarity

bilbodreams

Apologies if I am not in the right forum. I need some advice please. I ve been thinking (too much) about this and I am not getting anywhere

We are a family of 4 plus a dog, two adults (we are not married but we have been together 18 years) and two small children and we live in a town centre two bed terrace. We bought this house before we had the children and the dog.

I love this house but unfortunately it's getting smaller and we cant add an extension.

We also have a house abroad, which is currently rented, the rent doesn't cover the mortgage completely but we wanted someone to live there

House A- Terrace house is worth 200000, mortgage 100000
House B-House abroad is worth 100000, mortgage 25000.
We really need to move. In this area family houses are 300000

I really want to keep the terrace house and maybe rent it, I've asked estate agents around here and it could rent for 650gbp pcm

I am also having thoughts about not selling the house abroad, because it could increase in value, ( if wed spend a bit of money on it) but we dont have intention of living there again.

I don't have pension (my oh has), so it could be used as my pension plan. I need to sort some kind of investment.

Don't know what to do, we need to move to a bigger place. Our lovely terrace is just nt practica anymr. My oh thinks we should sell the lot but I am an overthiker:o

This post is more like a essay,apologies for the length, I guess I just need some guidance to help us make a decision
Thank you

Bluebirdman_of_Alcathays

Why do you think property is the only investment you can make? You already have multiple properties - I'm sure an IFA would tell you you need to diversify.


Be aware that because of the multiple properties you will be open to the additional 3% SDLT when you buy another house.

Doozergirl

Overthinking is the worst. The best thing is definitely to do something, even if it's small. Small steps.

You haven't mentioned how you intend to pay for the new house, which is quite important. Have you sat down with a mortgage broker and looked at getting an agreement in principal? The decision on affordability of a third property may be made for you by a lender.

Otherwise the next question is if you can afford to subsidise two rental properties each month, including voids, until the mortgages are paid off in addition to another mortgage? Interest rates are also low right now.

marliepanda

Can you afford to pay all three mortgages if a tenant doesn't pay/you have empty property?

If not, it's a not go.

It's potentially a no go for other reasons too, but never bank on having a tenant 100% of the time.

Guest101

And the fact is your emotionally attached - which doesn't mix with business

Chanes

I would sell all of it and buy something really nice where you want to be.

fairy_lights

Letting out your terraced house wouldn't just mean keeping a property as an investment, it would also mean becoming a landlord and taking on all the responsibilities that come with that.
Unless you and your OH both have incredibly well paid jobs I think you might be overstretching yourselves slightly if you take on another mortgaged property.

JimmyTheWig

bilbodreams wrote: »

We also have a house abroad, which is currently rented, the rent doesn't cover the mortgage completely but we wanted someone to live there
...
House B-House abroad is worth 100000, mortgage 25000.
...
I am also having thoughts about not selling the house abroad, because it could increase in value, ( if wed spend a bit of money on it) but we dont have intention of living there again.

I'm maybe mis-reading this.
Are you saying that you have a house abroad that you have no intention of living in again that is costing you money each month?
Furthermore, are you saying that the mortgage on it is only 25% of its value?

I'm afraid that selling the house abroad is a no-brainer.
That will give you £75k cash.
That money can reduce the mortgage you need on your new, bigger house. Lets say you pay 3% interest on your mortgage. The money tied up in this house that you aren't going to live in and is costing you money each month will save you £188 a month!

chelseablue

I would sell both and buy a house you really want to live in

bilbodreams

Thank you all for your replies
Yes, an extra 3% SDLT when buying another house is sthg to consider, need to make some numbers and perhaps get a MIP in place.
There is no way with our actual income we could subsidise 3 properties without having rental income.

I know being a landlord is not all straight forward, that said, I don't think we'd have any issues renting the terrace ( good location, work available in the area). In fact, when we lived in our property abroad , there was never a void period, we were very lucky.
My oh leans more over the idea of selling it all, me.....I just don't think straight. I know there are more ways to invest and any IFA would advise to diversify.
Jimmy, yes, the house abroad (with no intention of moving back in) is costing us money. We get about 170 pounds rent and its costing us about 300 to keep. We have 75000 equity. Atm is rented very cheaply to a lady who was having a hard time, so I thought she could keep an eye on it for us and she'd have a place to live.

I am very practical on other areas of my life, believe it or not, but when it comes to houses I get overly emotional :0)

Cakeguts

£650 pcm for a £200K house is not a good rate of return. So there is no point in even thinking about letting the terraced house you might as well sell that one and put the money into the new one. Owning a rental that is costing you money is also not a good idea so the one abroad needs to be sold as well.

What you need to do is to sell all the houses that you have got now and then when you have the cash think about what you would like to invest for the future and what you would like to put into your bigger home. Often houses that are great for living in as an owner occupier do not offer good returns as a rental.