We'd like to remind Forumites to please avoid political debate on the Forum... Read More »
PLEASE READ BEFORE POSTING: Hello Forumites! In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non-MoneySaving matters are not permitted per the Forum rules. While we understand that mentioning house prices may sometimes be relevant to a user's specific MoneySaving situation, we ask that you please avoid veering into broad, general debates about the market, the economy and politics, as these can unfortunately lead to abusive or hateful behaviour. Threads that are found to have derailed into wider discussions may be removed. Users who repeatedly disregard this may have their Forum account banned. Please also avoid posting personally identifiable information, including links to your own online property listing which may reveal your address. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
Advice re selling a tenanted house
SamLam
Posts: 2 Newbie
Hi all, I'm new here so please be gentle!
I'm just looking for some advice from any of you who are good with finances!
I bought a house in 2004 for £54000 and decided to rent it out to go travelling in 2011. I no longer have a mortgage on it and it is rented out fully furnished with a rental income of £450 a month (obviously minus letting agent fees, insurance, safety checks etc). I've recently had it valued as my tenant was thinking of buying it and was told it's now worth around £67-70,000. I'm currently living in a sharehouse in a different city where I now work and trying to save up for another house, however the city I live in now is a lot more expensive than the city where my house is. For the same size house I'm looking at £200,000. My tenant has now decided she can't afford to buy my house and is wanting to wait a couple of years until Brexit has happened in case she has to go back to Germany where she's from, however she wants to continue renting my house.
So my question is, would it be better to try to sell my house with her as a tenant, ie try to sell it to another landlord and potentially get less than if it was empty and pay estate agent fees but have a smaller mortgage on my new house OR keep my house and use the rental income to pay some of my new mortgage but have to pay £7500 stamp duty for the new house (as it's a second home) and then in a couple of years if she decides to buy my house I might get more for it and avoid estate agent fees or if she moves out I can sell it empty and then pay a big chunk off my mortgage or just leave it rented out and keep using the rent to pay my mortgage?
Sorry this is very long winded but I can't decide what to do for the best as everyone always says to hold on to property but I'm not sure if it's worth it with the expensive stamp duty on second homes now.
Thanks in advance for any advice/opinions!
I'm just looking for some advice from any of you who are good with finances!
I bought a house in 2004 for £54000 and decided to rent it out to go travelling in 2011. I no longer have a mortgage on it and it is rented out fully furnished with a rental income of £450 a month (obviously minus letting agent fees, insurance, safety checks etc). I've recently had it valued as my tenant was thinking of buying it and was told it's now worth around £67-70,000. I'm currently living in a sharehouse in a different city where I now work and trying to save up for another house, however the city I live in now is a lot more expensive than the city where my house is. For the same size house I'm looking at £200,000. My tenant has now decided she can't afford to buy my house and is wanting to wait a couple of years until Brexit has happened in case she has to go back to Germany where she's from, however she wants to continue renting my house.
So my question is, would it be better to try to sell my house with her as a tenant, ie try to sell it to another landlord and potentially get less than if it was empty and pay estate agent fees but have a smaller mortgage on my new house OR keep my house and use the rental income to pay some of my new mortgage but have to pay £7500 stamp duty for the new house (as it's a second home) and then in a couple of years if she decides to buy my house I might get more for it and avoid estate agent fees or if she moves out I can sell it empty and then pay a big chunk off my mortgage or just leave it rented out and keep using the rent to pay my mortgage?
Sorry this is very long winded but I can't decide what to do for the best as everyone always says to hold on to property but I'm not sure if it's worth it with the expensive stamp duty on second homes now.
Thanks in advance for any advice/opinions!
0
Comments
-
You won't be able to use the rental income when being assessed for a mortgage. the lender will disregard it. Plus as you say, you'll be paying additional SDLT. I would discount this option..
So my question is, would it be better to try to sell my house with her as a tenant, ie try to sell it to another landlord and potentially get less than if it was empty and pay estate agent fees but have a smaller mortgage on my new house OR keep my house and use the rental income to pay some of my new mortgage but have to pay £7500 stamp duty for the new house (as it's a second home)
Selling it with the tenant in situ makes no sense. It will take much longer and you really won't get anything like as much.
The 3rd option, which you've missed out, is to end the tenancy (at hatever point the tenancy allows), and then market it as a vacant property. Having no mortgage makes this easier as there's no pressure to maintain the rent tocover the mortgage till the last minute.0 -
Honestly? Your best option is to get rid of her and sell the property vacant.
Selling a tenanted property means that you are reducing your potential buyers by a LOT. And I doubt you would get the same price than if you sold it empty.
Keeping it as a BTL might possibly be an option if you can afford to pay 2 mortgages should something go wrong. Can you? Either way it's still going to be a whole load of hassle.0 -
Sorry I'm not sure how to copy replies into mine?!
Reply to G_M: I saw a mortgage advisor yesterday and he included the rental income to obtain a mortgage in principle for me. He advised me to keep my house but I'm not sure!
I'm just thinking if I give my tenant 2 months notice then it doesn't sell for a long time I'm then losing out on rental income and I would really like to buy a house asap and would either need my rental income or the money from the sale of my house to do this.
Reply to 19lottie82: I don't have a mortgage on the tenanted property, I've already paid if off. I'm currently using the rental income to pay the rent on my current place and was thinking I'd use it towards my monthly mortgage repayments (it won't cover the whole lot but most of it).
Thanks for your advice both! 0 -
Ah well, in that case......
Glad you managed to reach a decision.0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 351.4K Banking & Borrowing
- 253.2K Reduce Debt & Boost Income
- 453.8K Spending & Discounts
- 244.4K Work, Benefits & Business
- 599.6K Mortgages, Homes & Bills
- 177.1K Life & Family
- 257.9K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.2K Discuss & Feedback
- 37.6K Read-Only Boards