Sell or Rent my flat?

Se99paj

I'm currently living in my flat, I have 4 years left on a fixed mortgage (1.79%), the mortgage itself continues through to 2036. The flat is probably worth about £210k and I have less than £100k remaining on the mortgage. My personal circumstances have changed and I'm now looking to move in with my partner, she already has a property and I'm trying to decide what I should do with my flat.


Sell the property
I could sell the property, even with the early repayment fees from my mortgage I'd make just over £100k profit, this money could be invested over time or put towards a future property.
This is also a hassle free option, no tenants, letting agents, etc. I'll also have more disposable income as we split the house bills, some of this could be used for saving.
This would also make the property available for another first time buyer - I never intended to buy this flat as an investment.


Rent the property
There are no short term benefits in me renting, in fact due to the new tax rules that are coming in I estimate its going to cost £1000 a year, but you do get the extra income from rent once the mortgage is paid off.
I'm assuming the increase in property value isn't really a factor, the benefit is the rental income not the future sale price of the flat (If I did sell I'd need to consider CGT)
I would have the extra headache of tenants, letting agents, etc
I would pay extra stamp duty on any new property I buy in the future (This would be a significant chunk of money in the South).
I'd be blocking any first time buyers onto the property ladder
I also think the government will continue to find ways to dissuade people from becoming landlords.


My Opinion
I've done some calculations on this and I don't think there is a great deal between then two financially, but both calculations are based on various assumptions and past performance doesn't necessarily reflect future results. Also various people I speak to think renting is the way forward, but I don't think they've really looked into this and they're basing their opinion on historical beliefs.
So I'm looking for opinions/views on what is the best way forward.

Teamocil

You have correctly identified that selling it makes it available for a first time buyer. Sell it.

Marvel1

Read G_M's Guide to Tenancies in England/Wales

davidwood681

People on this site usually advise you to sell....

But I think if you are in the position to keep something, you should keep it.

Plus if things don't go well with your other half you won't have the hassle of going through the whole mortgage application again

Marvel1

davidwood681 wrote: »

People on this site usually advise you to sell....

Mainly because there is nothing worse than inexperienced landlords who go into the business and have no clue what they are doing and can't separate the personal connection their flat/house is "no longer theirs" which is not fair on tenants.

Cakeguts

Sell it. Letting property is a business so the properties need to be bought with being let in mind. Not all owner occupied properties make good rental properties. If it doesn't the tenant could stop paying rent and they could wreck the place. It is better if you don't let a property that you have emotional involvement with.

csgohan4

davidwood681 wrote: »

People on this site usually advise you to sell....

But I think if you are in the position to keep something, you should keep it.

Plus if things don't go well with your other half you won't have the hassle of going through the whole mortgage application again

Here's things in reality


https://forums.moneysavingexpert.com/discussion/5896992/evicting-tenants-via-court-and-bailiffs

tlc678910

hi,
The worst thing you could do is sell but let the equity ebb away over time by eating into it for day to day living - is this a danger for you? If so invest it somewhere where there is a notice period to get it back.

Will you be paying rent at your partner's? If so will you be building equity in this property? If your partner has a mortgage (and you trust them) you could buy a chunk of their property with your equity. If so do it properly using a solicitor to protect your share.

If you think it's more likely that you and your partner would want to buy a new property together in the near future then keep your equity safe for that.

Remember if you invest in your partner's house and you break up but they won't sell or remortgage to release your money you have a difficult battle on your hands. If you want to buy anywhere else while owning part of this property you would also face the additional stamp duty.

Good luck

loveka

I will share my personal experience.

We were in this position. I thought we should sell, my partner thought we should keep it. As it was his flat, he won!

I used to really wish we had sold it, as the money would have been very useful, we could have had a bigger house to live in etc.

After 11 years we had a catastrophic financial issue. By that time, the flat was making an income as interest rates had dropped. Without that flat I just don't know how we would have kept our home.

My partner was right to say we should keep it. I am so glad that we have it as a pension, and the rental income pays our mortgage on our own house.

People will say that we didn't have the stamp duty issues when we made the decision. However, interest rates back then we're nearly 7%.

I don't think now is a very good time to sell unless you are buying at the same time or absolutely have to.

Why not try renting for a few years, until the fixed rate is up?

Being an accidental landlord seems to be painted as crime of the century. If you are a fair person with a moral compass there is no reason why you shouldn't make an excellent landlord.

We use Open Rent. You get to meet, and choose, tenants yourself. We have had one absolutely dreadful tenant in 19 years, ironically through a letting agent!