To Let or Sell, that is the question.

Retired_Mortgage_Adviser

440 profit/month = 5,280/year
paid about 87k for the flat

Ignoring other factors, that's a proven annual return of 6% before tax, which (to me) is more than enough reason to continue letting it out. You could potentially get 6% return on some P2P investments, but the risk of capital loss would be far higher.

seven-day-weekend wrote: »

See my answers in blue above and thanks for your reply.

Davy_Jones_II

You likely need to knock tax off that yield, and given the age of the property it’s likely that there’s been little to no maintenance needed yet, so that needs to be factored in too.

My tenants are great but I’ll not likely let again when they leave, at least not until after a general election, as I don’t want to be a landlord under Labour.

AndyTails

Retired_Mortgage_Adviser wrote: »

From an investment point of view -

1. What did you pay for the flat (including stamp duty or other buying costs)?
2. What is the current profit per month (rent less service charge, ground rent, other expenses)?

For example, if you got the flat for 150k and you are currently achieving a profit of £350/month (before tax), that's a 2.80% return on investment. Can you get 2.8% elsewhere with a similar amount of risk?

Personally, if the flat is giving a decent return on investment, has proved easy to let and maintain and I had no use for lump sum cash, I'd just let it out again.

Basing a decision like this on pie-in-the-sky policies by Labour/Tories in the current turbulent times would not be something I myself would do.

Nit-picking here, but when considering buying an investment property the purchase price and buying costs are relevant to working out return on investment, but when considering selling such a property the sale price less selling cost is what is relevant.

There's no point saying "I bought this flat for £50k 20 years ago, therefore I'm getting 12% return on investment" when in actuality it's now worth £300k, so it's only 2%. Because what you should be comparing against is what you can achieve in other types of investment, which you'd be doing with the current capital, not the original capital.

Otherwise a useful answer, and considering the short time since the purchase of this investment property my point's nearly moot anyway.

seven-day-weekend

Davy_Jones_II wrote: »

You likely need to knock tax off that yield, and given the age of the property it’s likely that there’s been little to no maintenance needed yet, so that needs to be factored in too.

My tenants are great but I’ll not likely let again when they leave, at least not until after a general election, as I don’t want to be a landlord under Labour.

My husband and I own the flat as 50/50 tenants-in common, and when my share of the profit is added to my other income, last year I paid £5 tax. My husband paid tax on the whole of his rental income, but even so, between us it could be a lot worse

You are quite right in that we haven't had to do much maintenance. Having always lived ourselves in old houses, we couldn't believe it on completion day when all we had to do was change a light bulb!

We don't want to be Landlords under Labour either. However, if we let again, we will start with a six- month contract and hopefully will know by the end of this the colour of the Government. Our present tenant has not given us formal notice yet. She has to do it by the 20th of the month, to leave on the 19th of the following month.

getmore4less

If you cleared £90k selling, current net income say £400pm

That's 18years income covered(investing at inflation rate)

xylophone

You seem to have had an easy ride with your model tenant - this shouldn't colour your views of the future.

Do you want to be a landlord late into retirement?

Had you considered selling and investing the money in income bearing funds and drawing a monthly income?

Retired_Mortgage_Adviser

Agreed. I would not have used the purchase price if it was a long time ago.

Given that OP bought the property only 3 years ago, I just went with confirmed numbers as opposed to what they might be able to achieve in a sale today.

AndyTails wrote: »

Nit-picking here, but when considering buying an investment property the purchase price and buying costs are relevant to working out return on investment, but when considering selling such a property the sale price less selling cost is what is relevant.

need_an_answer

What was the long term plan when you bought 3 years ago?

How long were you thinking of being LL's?

Every situation is different but for me I went into it with a timeframe,partly based on age,partly based on repaying the mortgages and allowing hopefully us enough time at the end of that time frame to enjoy life afterwards.

Its been 7 years so far for us and despite uncertainty and turbulence in politics,housing markets and whatever the local area to us is still in very high demand for rentals.
I know that can change quickly but I personally cant see anything too drastic on the horizon to derail our original plan.

3 years doesn't sound a long time to hold something and create an income from it,but as I said its all about what your local area is like rental wise....and of course your personal preferences may change and you think "hey you know what,lets sell up and travel the world...."

As I said earlier don't let it become a chore to you...
I still have a belief that a good tenant stays with a good LL.Choose your tenants well and be a proactive LL and you'll probably find another tenant who becomes long term.

Average tenant stay time where I live are 18 months, I like to think we have some longer tenants simply because out tenants want to stay in a property they enjoy living in.

seven-day-weekend

xylophone wrote: »

You seem to have had an easy ride with your model tenant - this shouldn't colour your views of the future.

Do you want to be a landlord late into retirement? If not we will sell (we are nearly 70 and 71).

Had you considered selling and investing the money in income bearing funds and drawing a monthly income? Yes, we are going to ask advice about this

We have actually had three tenants in the flat since we bought it.

The first one was a good tenant (he paid his rent and kept the place immaculate), but had to give the tenancy up when he became detained at Her Majesty's Pleasure.

The second one moved multiple other people in but luckily they all left after three months (we gave her permission to relinquish the tenancy early).

This one has been in nine months and has been a model tenant since day one.

seven-day-weekend

need_an_answer wrote: »

What was the long term plan when you bought 3 years ago? To rent it and make an income from it until we didn't want to any more (which may be never).

How long were you thinking of being LL's? As above

Every situation is different but for me I went into it with a timeframe,partly based on age,partly based on repaying the mortgages and allowing hopefully us enough time at the end of that time frame to enjoy life afterwards.

Its been 7 years so far for us and despite uncertainty and turbulence in politics,housing markets and whatever the local area to us is still in very high demand for rentals.
I know that can change quickly but I personally cant see anything too drastic on the horizon to derail our original plan.

3 years doesn't sound a long time to hold something and create an income from it,but as I said its all about what your local area is like rental wise....and of course your personal preferences may change and you think "hey you know what,lets sell up and travel the world...." Agreed!

As I said earlier don't let it become a chore to you...
I still have a belief that a good tenant stays with a good LL.Choose your tenants well and be a proactive LL and you'll probably find another tenant who becomes long term.

Average tenant stay time where I live are 18 months, I like to think we have some longer tenants simply because out tenants want to stay in a property they enjoy living in.

See my comments in blue.