Letting to rent - is it such a bad idea??

ttaylor

I had originally planned to buy a second property to live in but am having second thoughts due to all the changes in stamp duty and tax.
I own one property with a mortgage and its let out directly to a tenant who doesnt give me too much trouble and looks after it. I have asked and she will stay there as long as possible.
So I am considering renting a small place myself instead of buying.
I am single and have few possessions so moving is easy for me.
It will mean I pay market rent (mostly offset by rent I receive).
It also means I can continue to stay on the property ladder and pay off my existing mortgage.
If I stuck to my original plan of buying the stamp duty alone I would pay is almost a years rent if I rented somewhere. Add to that solicitor fees and mortgage fees and it adds up!
Thoughts please!?

xylophone

You are not currently renting?

Red-Squirrel_2

Up to you completely.

There are pros and cons for both.

If you rent, you won’t pay buying costs and you won’t be responsible for maintenance of the property you live in, but monthly rents are usually higher than mortgage payments, you are at the mercy of a private landlord with little security and you aren’t investing in an asset.

If you buy, you have the upfront costs plus ongoing maintenance but you have security and you have an asset that should appreciate if you wait long enough!

Pixie5740

xylophone wrote: »

You are not currently renting?

Check the posting history. 29 threads, the majority of which are asking if the OP should fly the best.

Red-Squirrel_2

Pixie5740 wrote: »

Check the posting history. 29 threads, the majority of which are asking if the OP should fly the best.

And apparently nudging towards 40!

!!!!!! do your parents a favour and just get out! Rent for now, you can be out by a Christmas, best present you’ll ever get them.

xylophone

!!!!!! do your parents a favour and just get out! Rent for now, you can be out by a Christmas, best present you’ll ever get them.

His parents might actually like his living with them?

One thought though - it seems that he has never lived in the property he owns, so it is not his PPR - CGT on sale?



https://www.gov.uk/tax-sell-home

You don’t pay Capital Gains Tax when you sell (or ‘dispose of’) your home if all of the following apply:

you have one home and you’ve lived in it as your main home for all the time you’ve owned it
you haven’t let part of it out - this doesn’t include having a single lodger
you haven’t used part of it for business only
the grounds, including all buildings, are less than 5,000 square metres (just over an acre) in total
you didn’t buy it just to make a gain

And if he buys another, there's the extra stamp duty?

And does this https://forums.moneysavingexpert.com/discussion/comment/74307460#Comment_74307460

My dad thinks I should keep the buy to let and possibly buy another with the equity as I have about 50% paid off now and let these properties pay for themselves until I retire and live off the income and not worry about a pension

mean that he is not contributing to a pension?

Red-Squirrel_2

xylophone wrote: »

His parents might actually like his living with them?

You think when he was born their big hope for his life and theirs was that he’d still be under their roof procrastinating about starting his adult life in his late thirties?

Cakeguts

Move out and rent something. In France owning a house that is let and renting somewhere else when you move job is normal. It is only in the UK that it is considered odd.

ttaylor

Hi and thanks to be clear I have previously lived in my let property. The other times I have lodged at a friends or been at parents. They don't mind me living there it's me that wants to move out due to age etc.
Sounds like it's not such a bad idea then and I have the security of knowing I'm already on the ladder?

ttaylor

Also yes it's true I don't have a pension because I prefer property as it's a tangible asset.

badger09

You've been asking the same, or similar questions since February 2013.

https://forums.moneysavingexpert.com/discussion/4447879/buy-another-flat-or-not

Probably time to make a decision:cool: