Selling the house & renting in retirement ?

Joeygirl72

Hi

Cannot find a thread on this one.
Has anyone done this ? How is it going?
Or, thinking of this as an option. What are your plans?

I have been thinking about this for a while. Still A few years off retirement, but after making a profit on property in the last decade or two, cashing in our house makes sense ( we have done the sums).

Pension plans are so individual, I know, all depends on your own circumstances but there is just my husband & I - absolutely zero dependants to leave our hard earned savings to & we want to enjoy it.

All my peers have oodles of kids and grandkids & want to leave their nest eggs to them, understandably......

There must be another contrarian out there, thinking this way......?

Brynsam

I have a very wealthy friend who did precisely that. It gave him freedom to live wherever he pleased, move when he wanted to without ever getting involved in the dreaded 'chain', he never had to worry about maintenance... If you are sure you have the funds to live how and where you want to, it's a great idea for those without dependants. Also makes sorting out your estate a lot easier when you die if you don't have to worry about selling a property.

kidmugsy

Another possibility would be to keep the house but liberate some capital by Equity Release. If, however, you fancy the idea of being footloose as described by Brynsam, it's a less attractive idea.

You could consider putting a toe in the water first by moving out and letting the house. If you find you enjoy the freedom then you could sell. There's a risk, though, of a new government confiscating some of your property rights and handing them to your tenant.

Tealblue

kidmugsy wrote: »

Another possibility would be to keep the house but liberate some capital by Equity Release. If, however, you fancy the idea of being footloose as described by Brynsam, it's a less attractive idea.

You could consider putting a toe in the water first by moving out and letting the house. If you find you enjoy the freedom then you could sell. There's a risk, though, of a new government confiscating some of your property rights and handing them to your tenant.

I guess it depends which you prefer: the 'security' of still owning a piece of real estate, or the freedom which comes from not owning something for which, as landlord, you are ultimately responsible (even if you do use an agent to manage it).

drumtochty

After many years of wandering and I hope you both have many nice years of wandering.


I think we will all say will say, "that was great but a nice easy to run house somewhere is needed" after after stage one of retirement, the gogo stage and stage 2, the go stage. In stage 3 which could last say early 80's to say 90 ish you want a place where you "feel at home" whatever that means.


Now when you get back to "that place" all your friends may have moved on or not.


Without knowing your circumstances or even where that "mythical place" may or may not be.



I think have a nominal return to some where plan has to be on the back burner at some time.

AnotherJoe

I suppose if you got lucky and are selling, say a £1M or £2M house in London then that would pay a fair bit of rent for a long time, especially if you moved out of London. Though you could get the same effect by selling & moving to a cheaper property.


But, over time rents will rise and your money will need at least to keep pace with inflation or the real value of it wont be what you started with and you'll run out quicker. You'll also need to keep a buffer of cash to prevent running out really long term.


It may be of course you have so much money that thats not an issue but then again in that case you could downsize to a smaller property (or same size property but cheaper location) and that would be your buffer. In effect a hybrid scheme, lets say you sell, buy a 2 bed flat which you rent out and then live on the rest of the cash (and the rental income) to pay the rent on another property. If the cash gets really low, boot tenants out, move into flat. The flat also acts as a safety net against high house price rises, if they do, rents should rise so that rising rental can offset your rising rental.

A_Nice_Englishman

I'm in a similar position to the OP with house, pension, savings and investments but no children to leave it to.

Ideally, my money and equity will run out just as I die but I have no idea whether that will be next week or in forty years' time. My main concern is paying for any care I may need in the future (no children or grandchildren to look after me, remember). I do not want to take pot luck on what the Government of the day deems appropriate.

kidmugsy

Another idea would be to sell the house and to invest part of the money in shares that you expect to mimic house prices e.g. Hearthstone and any competitors they might have, builders, builders' merchants, estate agents, REITs for residential property abroad, ....

You'd want this money in tax shelters if possible - ISAs, SIPPs, ....
If you don't have spare income or capital to fill those with you could always increase the size of your mortgage and use that money. Or: sell the house now and use a chunk of capital to buy a property somewhere that you could imagine retiring to eventually, a property that you'd be happy to live in. Also a property that would be easy to let for the time being. Then you could rent a property somewhere that's suitable for your work and, again, see how this succeeds.

fred990

Good thread. Same situation with no intention of having the hassle of home ownership in later life.
Cowboy tradesmen? No thanks!
I won't be analysing the finances to every penny either. The thought of being able to move about is very appealing. Will probably get a pretty decent motor home/camper too.

kidmugsy

fred990 wrote: »

. Will probably get a pretty decent motor home/camper too.

Tied to a motorhome? Cowboy mechanics? Not for me.

Join the Youth Hostels Association and get used to thumbing a lift. Modern tents are very light to carry about too.

Linton

It all sounds great in early retirement. What about the risk of being evicted in your 80's?


Similarly to the OP we have no-one who we would want to inherit our house. Our intention is to take out full equity release when we reach an age where it makes sense.