Advice on property (and life)

hazyjo

Ojb wrote: »

If you read the post hazyjo you would see that a remortgage has taken place.
Instead of shutting down the thread with a link to another one. Happens a lot on these forums. Makes me wonder what's a forum for. Refereeing to old posts should be banned. It stifles the flow of threads. Thanks hazyjo.

The thread seemed relevant. I didn't see anyone advising you to remortgage your BTL. I presume it is a BTL mortgage? Not sure I can work out why you remortgaged it. Is it portable? Are you looking to buy another BTL then? Only I didn't see that as an option in your list.

I thought you were looking for a property for yourself. Maybe try to keep things shorter and more factual as I think I'm getting confused.

No idea why you would consider renting somewhere which costs the same as you're receiving (or not receiving as the case may be!) from your tenant. If they don't pay, you'll be finding costs to boot her out, along with the mortgage and the rent.

You plan to pay off your mortgage in 5 years?! If you could afford to save that much money, why remortgage it? So what are you doing with the extra £70k-ish? Is that the £70k you refer to as having in the bank? So it's not money you've saved, it's money you've borrowed (ie the remortgage)?

If you put the £55k into savings, will you be getting better interest than what the loan is costing you? Can't see it myself.

What steps are you taking to get the money back that you lent out?

My brain is frazzled with it all. Not even sure I'm understanding all of your post.

If it were me, I would boot the tenant out, would not have remortgaged the BTL (this remortgage has really confused me), and would have bought myself a house with the equity, savings(?), chased the debts, and a mortgage. Simple.

tlc678910

Hi,
You don't sound like you mind being at your parents and you say that they don't mind you being there. As long as you are paying your way - paying them rent and your share of the bills and food then why not stay there and save so after the five years mortgage fix expires you can buy the best place you can (if you want to). I don't think your age is a reason to move if you are happy as you are, as long as you are paying your way and not a drain on your parents. Why not show them they are appreciated and take them on a holiday (or pay for them to go if that much time together is a bad idea)!

Re the 70k you are owed. If this was lent in small drips and repayments have never been made then write it off - you knew what you were in for after the first time you were let down. If the money is owed to your parents or your mate who put you up and you were not fully paying your way (rent plus bills plus food) then write it off - or a fair proportion of it. If it was lent as a lump for example for debt repayment or house deposit what agreement was made at the time? If your parents owe you a lot of money you could ask them to put in their will that you are repaid before their estate is distributed.

Going forward do not tell anyone (friends / family / guy in the pub) that you have tens of thousands in the bank. As long as you are paying your way this is not dishonest it is just none of their business. Lots of people have a need/want/ debt /business idea that they will be happy to spend your money on learn from your mistakes otherwise in five years time when the mortgage fix is over you will have nothing - just lots of empty promises and IOUs. I think the saying goes "fool me once shame on you, fool me twice shame on me"!

Tlc

Ojb

Thanks for replies. I intended with the remortgage to use the 70k as a deposit on buying somewhere to live. But it's looking less likely as 1. Having ongoing problems with tenant paying rent in full/ on time. 2. Lack of nice properties in my price range.
With the loaned money I think I'll just have to keep on at it and get little bit of it back here and there.
The advice on evicting tenant sounds good but I've also had a lot of scare stories about it taking 9 months and expect rent to stop etc.
Is there any quick way I could cut my losses and get shot of the property at a discount ie wash my hands of it?

Slithery

Ojb wrote: »

Is there any quick way I could cut my losses and get shot of the property at a discount ie wash my hands of it?

Sell it to another landlord with the tenant in-situ.

tlc678910

Hi,
If you sold the flat with a tenant in place who is a bad payer you will get less than it is worth usually and the tenant will likely be evicted immediately afterwards (why would the new landlord want a bad payer).

It might be financially better for you to bung the tenant a couple of grand to leave quickly and quietly. Your tenant can leave anytime by mutual agreement so you could tell them you are thinking of selling and if they can leave in a month/two whatever you need and return the keys with the place in a reasonable condition you will pay them (whatever you think is incentive enough). It will be informal agreement so if you say no the place is full of rubbish I’m not paying you - they can choose not to surrender the tenancy. It might be a bitter pill to swallow but if paying 2k gets 5/10 pllus on the flat value?

If you do this definitely keep written records of letters/emails where mutual surrender is agreed and don’t pay until the keys to an empty property are in your hand. If they want money for a deposit that is a risk but pay it direct to the new landlord. Make it clear the agreement is separate to any deposit which will be dealt with in the usual way.

Of course you will then have no tenant while selling.

There is also a fair chance of course that if you just tell your tenant you are selling in the summer they will make arrangements to leave without drama. You would have to serve formal notice later but won’t need to if they have gone. (Of course you are right if they did string it out it could take ages but you could turn to offering incentives later) If they don’t pay the last month etc then you haven’t lost much but you might find that they want a good reference for a new landlord.

I think giving plenty of time is the decent thing to do as your need to sell is not urgent. Offering a bonus on leaving for the place in decent condition might make your life easier.

Tlc

[Deleted User]

No real way of predicting the future of course, but if they are having problems paying, they probably will have problems finding somewhere else to move to. The suggestion above may work, but you may also find the tenant has to look to social housing for help or has no where to go (if single and not with a defined need, the council won't help them). In that case they will string it out as long as they can.

OP, you know your tenant better than we do so you can guess which outcome is most likely.

But either way, it does seem as if, if you want to buy a larger place, you will have to sell the smaller property you own presently. And take the losses you may incur (loss of rent etc) out of the increased capital once you have sold.