Sell or rent?

melj16

KatieDee wrote: »

Where did you work out you could borrow "up to £260,000" with your current outgoings plus your mortgage?

I earn about £40k a year, my partner £24k. We don't have childcare costs, no car finance, very low outgoings and when I accidentally entered that I already owned a property on an AIP, the maximum anybody would lend us was £180,000.

It isn't just the financial side of letting a property, it's the stress of "what ifs". Given the very likely increase in your outgoings over the next few years, could you afford to cover both mortgages it your tenant stopped paying?

Personally I would sell. I know it's a pain in the bum and takes longer, but it just means less risk.

I earn £43k per year and could borrow up to £207k on my income alone.... And that's with another mortgage (it's self sufficient)

MNM2903

melj16 wrote: »

I think if you had more equity in your home it would be more viable.

You can only borrow 75% of the value of your home on a buy to let mortgage. You don't have enough equity to raise money for a deposit. Also, the property won't be self financing in the eyes of the lender. The rent would need to be more than £475 if the mortgage was £420 pcm.

Thanks that's useful, I did think it was unlikely but it's an option we wanted to look at. Not being familiar with buy to let etc wasn't sure if the rent from it would offset the mortgage in tes of affordability, by the sound sounds of it that's not the case. Also 100% agree we definitely would be in a much better position if we could hold out for longer and get more equity and savings however were becoming a little Claustrophobic in here now and definitely need something bigger. I think we're just going to have to wait until it sells thanks for the input.

melj16

MNM2903 wrote: »

Thanks that's useful, I did think it was unlikely but it's an option we wanted to look at. Not being familiar with buy to let etc wasn't sure if the rent from it would offset the mortgage in tes of affordability, by the sound sounds of it that's not the case. Also 100% agree we definitely would be in a much better position if we could hold out for longer and get more equity and savings however were becoming a little Claustrophobic in here now and definitely need something bigger. I think we're just going to have to wait until it sells thanks for the input.

I know exactly how you feel. We moved into our house as a family of three and now we're a family of 5. We have been desperate for more space but it just wasn't viable with figures. We have overpaid as much as we could and been patient. I am currently buying our second property and keeping our existing to rent out whilst raising £30k deposit for the House from equity in old house. It will happen. Just be patient. Overpay as much as you can (within your allowances). You will see light at the end of the tunnel soon. Best of luck.

Cakeguts

I hope you can afford to pay two mortgages for around 9 months with no rent coming in. It can take that long to get possession of a house where the tenants have stopped paying the rent. During that time you still have to pay for repairs.


You have to plan for about a year with no rent. If you can't afford to do that don't let it. 2 bed houses can be a nightmare to let anyway.