To Sell or To Rent

Dedge77

I will quickly describe the situation I am in.

I own a flat which has around 52k left on my mortgage which still has 21 years to run. I am planning on moving in with my girlfriend as she is now expecting my first child. She is in council rented accomodation. We have been discussing if I should sell my flat or just simply rent it out. Here is where I would like some sound advice.

My neighbour just recently sold her flat and the company told her not to accept anything less than 100k, we live in Aberdeen and the prices have gone sky high. My flat is situated right next to the main hospital so would imagine it would be easy to offload.

I was planning either way of extending my mortgage to install central heating and generally give it a lick of paint to make it look easier on the eye anyway.

My mortgage payments, including insurances, are £450 a month. I have neither rented nor rented out before so I dont know the pro's and con's.
If someone could enlighten me on the best road to go down I would be grateful.

Thanks,
Kev

moneysavinmonkey

I could be wrong but I would think that if you owned a property yourself you wouldn't be allowed to live in council housing? I don't know if anyone can properly confirm or deny this, just seems a sensible conclusion.

I personally think you'd be wise to sell, a BTL could be as much as liability as a cash cow.. added in the likely direction of the housing market and I don't think it's a goer.

Dedge77

The council flat is in her name but it would be declared that I was living there. I didnt know there could be an issue with me still owning property but if that is the case I should look into that.

What does 'BTL' stand for?

Thanks,
Kev

moneysavinmonkey

BTL = Buy to Let! - ie rented out rather than owner occupied...Gosh you are new to this...

I don't know whether I'm right about the council house thing- it would just seem to me that given that there is such a shortage of social housing the council would be missing a trick by giving your 'family unit' (consisting of you and your girlfriend and baby) a subsidised flat when you already own one. certainly ethically you would agree to this, although practically for your family you may not see it that way!

Why is it that you are moving in with your girlfriend - why can't you all live in your property?

Given your level of knowledge of BTL, and the tough market conditions at the moment I wouldn't give it renting out a further thought.

However, I think you should get some advice, try CAB, on what would be the effect of you moving in with your girlfriend if you have either a flat or a wodge of cash from selling a flat! The amount of money you are talking about (50kish equity) is certainly going to affect any benefits your girlfriend currently receives.

Dedge77

Your right, I certainly am new to this but im trying to learn.

I called the local housing office and they said unless I was going for joint tennency she wouldnt have to declare me. We would of course have to inform regarding council tax though. We had a look at both our accomodation and decided that her flat was more suitable for several reasons.

I felt like selling as I didnt want the added hassle of having to constantly deal with it but a few people have said it could be more benificial to rent.

I will see if I can get round to the CAB to get information on renting and I will go check out the forum for tips on selling :T

moneysavinmonkey

oh dear. don't just rent it out cause 'everyone says it is a good idea' it was maybe a good idea around 2005 but that bandwagon hit the road long ago!

Whatever your do, make sure you do a lot of research into that.

Must say I'm rather surprised that the council say you don't have to declare that you are going to be living with your girlfriend. Maybe get that in writing to cover yourself.

mlz1413

OP everyone has good advise when it's not their time and money, I did up a house 2 yrs ago and was amazed at how many people had 'good advise' for me and don't mean close friends and family - everyone!

If you are about to have a new born baby you will probably not have the time to run a buy-a-let, you could put it in the hands of agents especially a company like northwood who give you set rent regardless of if the property is rented.

BUT you have to look at the pro's and con's - decide if your leaving your property for good. What happens in 2-5 yrs time, will you need a bigger place, a garden etc.

You could rent your place out for a year and then decide, you could sell it and put the money in a high interest account then look again.

Good Luck!