Not sure what to do, please help!!

bfc_wurz

I own a property outright that's worth 170k (3 bed semi) (the mortgage company have a legal charge on the property which I kept open after I paid off my mortgage in case I wanted to borrow on it again as it would make it easier). Anyway -  Ive seen a property I want to buy (offers over 325k) and I have approx 160k cash to put down on the new property (I'm in a very lucky position I know but I've worked hard and saved to get here). 

But I'm not sure what's best to do, these are my options (and there may be more if you enlighten me!!)
1) Remortgage my existing house to release some equity to use towards my new house, rent my existing out and pay for the new house outright
2) Sell my existing house and buy my new one with cash.
3) Rent my old house out obviously with no mortgage on it and then I get straight rental and get a new mortgage on my new house but putting a substantial deposit down.

Now just to add, Ive never rented a house out before and I believe its not as profitable as it used to be. Can anyone please advise me on what's best to do in my position.
I just can't get my head round which is the best way to go!!
Many thanks
Chris

Grumpy_chap

Have you investigated all the obligations of being a landlord?  
Have you done the sums and calculated financial outcome of being a landlord?

If you have any doubts about becoming a landlord, then your only viable option is "2) Sell my existing house and buy my new one with cash."

bfc_wurz

Grumpy_chap said:

Have you investigated all the obligations of being a landlord?  
Have you done the sums and calculated financial outcome of being a landlord?

If you have any doubts about becoming a landlord, then your only viable option is "2) Sell my existing house and buy my new one with cash."

Hi, thanks for your reply. No I don't know anything about becoming a landlord, the only thing that was making it more desirable is I have equity and cash to play with so I assumed the profit margins would be better for me

GDB2222

Surely, the basic sums mean that some of the options are not viable? 

Remortgage existing house, and raise how much? 90% of value if you are lucky, so that’s around £150k. Add the £160k in cash, so you have £310k max. The new place is £325k plus all the costs, such as 3% stamp duty surcharge.

Lots of people have made money from BTL, but mainly from prices going up. You had better be sure that will continue.

bfc_wurz

GDB2222 said:

Surely, the basic sums mean that some of the options are not viable? 

Remortgage existing house, and raise how much? 90% of value if you are lucky, so that’s around £150k. Add the £160k in cash, so you have £310k max. The new place is £325k plus all the costs, such as 3% stamp duty surcharge.

Lots of people have made money from BTL, but mainly from prices going up. You had better be sure that will continue.

Yeah I think you're right, I could muster up some extra maybe but doesn't leave me with much for anything else. You've made me see the light, Keep it simple, sell, put a decent deposit down and get a small mortgage on the new place and keep back some savings

Wyndham

Please don't become a landlord unless you know what you are doing.
There are many cautionary tales on this forum as to how that has worked out for people.