Is this a mad idea ?

in Over 50s Money Saving
28 replies 4.7K views
I’m 56 and live in a 3rd floor tenement flat worth approximately £250k.  Love my flat, though soundproofing not great
Considering selling my flat and renting. Calculated that the proceeds would allow me to rent a property for £800 p/month for 26 years. 
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  • MovingForwardsMovingForwards Forumite
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    What happens if rent shoots up in price?
    Why don't you sell up and move somewhere else?

    Personally I wouldn't go into rental for retirement as you're at the mercy of LLs and could be moving in your glory years instead of being settled. Would you be happy packing up and moving at 80 years old?
  • luvchocolateluvchocolate Forumite
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    Try housing associations for over 55s  secure tenancies and much cheaper than private 
  • p00hsticksp00hsticks Forumite
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    Considering selling my flat and renting.

    Why ?
    You don't give a reason - is it to free up money to do something with ? to move to a different part of the country ? to travel ? or what ?
    Without knowing why you are thinking this way it's impossible to give an opinion on whether it's crazy or not....
  • MalMonroeMalMonroe Forumite
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    Considering selling my flat and renting.

    Why ?
    You don't give a reason - is it to free up money to do something with ? to move to a different part of the country ? to travel ? or what ?
    Without knowing why you are thinking this way it's impossible to give an opinion on whether it's crazy or not....
    OP DID give a reason, which is - 'the proceeds would allow me to rent a property for £800 p/month for 26 years.' Thus living mortgage and rent-free for 26 years.
    My opinions are strictly my own. The forum advises everyone to double-check all information given by any forumite to ensure accuracy. Once commented, I rarely return to a thread, as per this "the moving finger writes and, having writ, moves on" (origin Omar Khayyam). I aspire to the (corny but true) saying - in a world where you can be anything, please be kind.
  • edited 22 March at 10:54PM
    MalMonroeMalMonroe Forumite
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    edited 22 March at 10:54PM
    I’m 56 and live in a 3rd floor tenement flat worth approximately £250k.  Love my flat, though soundproofing not great
    Considering selling my flat and renting. Calculated that the proceeds would allow me to rent a property for £800 p/month for 26 years. 
    But what happens when you're 82 and the money runs out? Eviction? I'm older than you and I'm considering moving from a rented flat and buying my own. Having owned property before, I just prefer living in my own home. Nothing wrong with renting for those who like it but I just don't.

    Ergo, in summary, I'd have to say yes, it IS a mad idea. Very very mad indeed.
    My opinions are strictly my own. The forum advises everyone to double-check all information given by any forumite to ensure accuracy. Once commented, I rarely return to a thread, as per this "the moving finger writes and, having writ, moves on" (origin Omar Khayyam). I aspire to the (corny but true) saying - in a world where you can be anything, please be kind.
  • edited 23 March at 10:42PM
    p00hsticksp00hsticks Forumite
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    edited 23 March at 10:42PM
    MalMonroe said:
    Considering selling my flat and renting.

    Why ?
    You don't give a reason - is it to free up money to do something with ? to move to a different part of the country ? to travel ? or what ?
    Without knowing why you are thinking this way it's impossible to give an opinion on whether it's crazy or not....
    OP DID give a reason, which is - 'the proceeds would allow me to rent a property for £800 p/month for 26 years.' Thus living mortgage and rent-free for 26 years.

    That's not really a full reason though - is it to rent a larger property in the same location as they are now ? or in a different part of the country where perhaps they cant afford to buy ?  Or is the motivation to clear an existing mortgage (the OP doesn't say if they are mortage free or not ) ? Or to free up some extra cash ? To reduce expenditure to allow early retirement ? I still say we need more information as to why the OP is considering this as a course of action....
  • shinytopshinytop Forumite
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    I’m 56 and live in a 3rd floor tenement flat worth approximately £250k.  Love my flat, though soundproofing not great
    Considering selling my flat and renting. Calculated that the proceeds would allow me to rent a property for £800 p/month for 26 years. 
    Assuming rent goes up with inflation, in 20 years time your £800 becomes £1200. You're going to have to invest your money in the stock market to keep up. A bad run on the markerts could make things difficult for you.  If this is your only source of income for your housing needs then yes, without knowing more of your circumstances, it sounds like a mad idea!
  • blue.peterblue.peter Forumite
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    I can't say that it's something I'd do. You say that you love your flat, and yet you're thinking of selling it and moving. OK, but why rent rather than buy? That seems very odd to me. As others have pointed out, there are clear disadvantages.

    I'm a little older than you and also own my house outright. Whilst I'm thinking of moving, I wouldn't consider renting rather than buying. For me, the disadvantages outweigh any benefits.

    Let's look at the maths. £800 x 12 x 26 = £249,600. OK, I can agree that much. But there's a big assumption in there: that rent increases won't exceed the interest that you can earn on capital. In practice, I very much doubt that that will actually happen. I would expect rent increases to exceed interest - and probably by quite a bit. That'll cut down your 26 years for a start. Of course, you could invest your capital on the stock market instead of putting it in interest-bearing savings, and thus get earnings that outstrip rent increases. But that carries a massive risk: that the reverse could happen, and your capital actually loses value.

    In 26 years, you'll be 82. I don't know what your health's like, but there appears to be a pretty good chance that you'll live longer than that. My father lived to 86, and my mother's still going at 88. What will you do for housing when your money runs out?
  • TELLIT01TELLIT01 Forumite
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    If the OP has no dependants I can see the attraction of freeing up money whilst still at an age to enjoy it.  The simple calculation of the money running out in x years doesn't take into account earnings up to retirement date, and pension income after that.  I'm guessing that some form of equity release won't be available for a flat, but might be worth investigating.
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